The Indian government has announced that it has settled 35 transfer pricing disputes with the US in the information technology services and information technology enabled services industries thanks to a framework agreement signed by the countries earlier this year.
Moreover, about 200 transfer pricing disputes between the countries should be resolved by year-end on account of the framework, the government said in the August 6 announcement. The framework agreement “opens to door” for the two countries to one day sign their first bilateral advance pricing agreement (APA), the government said.
The government also confirmed that it signed its first unilateral APA with a rollback provision on August 3, bringing the total count of unilateral APAs signed to 13. One bilateral APA has been signed with Japan.
India’s decision to allow rollback provisions in APAs was first announced in Finance Minister Arun Jaitley’s July 2014 Budget. The provision, which permits companies to apply agreements in APAs for up to four previous years, is designed to be cost-effective tool to reduce India’s large backlog of international tax disputes.
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