India resolves over 100 transfer pricing cases with US
Indian tax authority has resolved more than 100 disputes related to transfer pricing with the US in the past one year after the two countries signed the mutual agreement procedure (MAP) as part of their double taxation avoidance pact. To boost investment sentiments among multinational companies, the Central Board of Direct Taxes (CBDT) had signed a framework agreement with the US revenue authorities in January last year. The agreement, under the provision of Mutual Agreement Procedure (MAP) of the Indo-US Double Taxation Avoidance Convention (DTAC), seeks to resolve about 200 pending cases related to transfer pricing between the two countries. Most of these cases pertain to overseas transactions between group companies engaged in information technology services and IT-enabled services. “More than 100 cases have already been resolved and some more are expected to be resolved before the end of this fiscal,” a Finance Ministry statement said on Thursday. As part of efforts to reduce taxation disputes, the Indian government has also signed a number of advanced pricing agreements (APAs) with individual companies as well as different governments in the recent past. The government is also hopeful that the US authority will soon start accepting bilateral advanced pricing agreement applications. “Prior to resolution of disputes under the framework agreement the US bilateral APA programme was closed to India. The success of the framework agreement in short period of one year has led to the US revenue authorities opening up their bilateral APA programme to India. The USA is expected to begin accepting bilateral APA applications shortly,” the statement said. India is also working on similar agreements with other countries like Japan and the UK to reduce the number of pending disputes and enhance confidence among global investors. “The CBDT is confident that a combination of a robust APA programme and a streamlined MAP programme would be helpful in creating an environment of tax certainty and encourage MNCs to do business in India,” the statement added.
January 28, 2016 | 03:10pm IST
to success.