CBDT signs agreement with Japanese trading company
Q. CBDT entered into Bilateral APA with a Japanese trading company. What does APA stand for?- Published on 05 Aug 16
a. Advance Pricing Authority
b. Advance Price Agreement
c. Advanced Price Agreement
d. Advance Pricing Agreement
ANSWER: Advance Pricing Agreement
Central Board of Direct Taxes has entered into a Bilateral Advance Pricing Agreement on 2nd August 2016 with an Indian subsidiary of the Japanese trading company.
- This marks the first Bilateral APA with a Japanese company having a rollback provision.
- Overall, it is the fourth bilateral APA signed by CBDT and signing of this bilateral APA helps in ascertaining certainty in transfer pricing matters of MNC cases and dispute resolution.
- APA scheme was introduced as per the Income Tax Act in 2012 and the Rollback provisions were introduced in 2014