The Central Board of Direct Taxes entered into 174 advance pricing agreements with Indian taxpayers in FY25. The number sets a new record for the agency and includes unilateral APAs, bilateral APAs and multilateral APAs. This also takes the total number of APAs signed since the inception of the program to 815.
According to details shared by the CBDT spokesperson, this year also marks the highest number of APAs signed in a single financial year since the launch of the programme. 65 of the agreements signed in FY25 were BAPAs — the highest number of BAPAs finalized in any year so far. The BAPAs were signed as a consequence of entering into Mutual Agreements with India’s treaty partners namely Australia, Canada, Denmark, Japan, Singapore, the UK and the US.
The CBDT had also set a record in FY24 as it recorded 125 APAs with Indian taxpayers.
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The APA Scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and determining the arm’s length price of international transactions in advance for a maximum of five future years. The taxpayer also has the option to rollback the APA for four preceding years — ensuring tax certainty for nine years. The signing of bilateral APAs additionally provides the taxpayers with protection from any anticipated or actual double taxation.
According to press notes shared by the Indian government, the programme has contributed significantly to its “mission of promoting ease of doing business” — especially for Multi National Enterprises that have a large number of cross-border transactions within their group entities.
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