India Records Highest-Ever 174 Advance Pricing Agreements in FY 2024-25, Bringing Tax Certainty for Over 4,400 AYs: CBDT

India’s Advance Pricing Agreement (APA) programme achieved a major milestone in the financial year 2024-25 by signing a record 174 agreements with multinational companies. According to the latest Annual Report released by the Central Board of Direct Taxes (CBDT), the programme has now provided tax certainty for more than 4,400 assessment years since its launch in 2012.

The APA programme is a key initiative of the CBDT under the Ministry of Finance. It allows companies with cross-border transactions to determine in advance the pricing of goods and services traded between related entities. This helps in avoiding disputes over transfer pricing and ensures predictable taxation for multinational enterprises.

Out of the 174 APAs signed in 2024-25, 109 were Unilateral APAs (UAPAs) between the taxpayer and the Indian tax authority, while 65 were Bilateral APAs (BAPAs) involving both India and its tax treaty partners. The year also saw the signing of India’s first Multilateral APA. The United States, United Kingdom, Japan, Singapore and Australia were among the major partner countries in these bilateral agreements.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

Since its inception in 2012, India has signed a total of 815 APAs, which includes 615 unilateral and 200 bilateral agreements. The CBDT noted that these agreements have helped prevent or resolve potential disputes for over 2,200 assessment years, reducing the burden on courts and tax tribunals.

The report stated that the APA programme has emerged as a trusted tool for building a non-adversarial tax regime and promoting ease of doing business. It added that the 815 agreements signed so far have brought finality to the taxation of income of about Rs. 35,000 crore, translating into tax payments of roughly Rs. 10,000 crore without litigation.

The CBDT also observed that a growing number of companies are opting to renew their APAs, reflecting the confidence taxpayers have in the programme. Going forward, the department aims to make the APA process faster by encouraging early filing of applications and improving coordination with treaty partners.

Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates