India-Korea bilateral advance pricing agreements can include rollback, Indian tax board says

“Rollback” of a transfer pricing method to resolve disputes in previous open tax years is permitted for bilateral advance pricing agreements (APAs) involving Korea, India’s Central Board of Direct Taxes (CBDT) clarified March 17.

The revised India-Korea tax treaty, which entered into force September 12, 2016, allows taxpayers from both countries to apply for the mutual agreement procedure in transfer pricing disputes and to apply for bilateral APAs beginning fiscal year 2017-18, the CBDT noted.

Rollback will be allowed for bilateral APA involving international transactions with associated enterprises in Korea for the APA period beginning F Y 2017-18, the CBDT confirmed.

A rollback may provide a cost-effective way to resolve an ongoing transfer pricing dispute.

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