India’s Finance Ministry has released long-awaited regulations permitting rollback of an Indian advance pricing agreement’s (APA) method of determining arm’s length prices to earlier tax years. Quick action is required to take advantage of the rules for existing APA applications and agreements, though.
The provisions, dated March 14, were first announced in Finance Minister Arun Jaitley’s July 2014 Budget. It is hoped that rollback will provide a cost-effective tool to reduce India’s large backlog of international tax disputes.
The rules permit companies to roll back agreements on international transactions for up to four years. A new Form No. 3CEC is required to be submitted to take advantage of the rules.
Taxpayers must take quick action, though, if they have already obtained an APA or have filed an APA application prior to January 1. In such cases, the Form No. 3CEC must be filed by March 31.
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