The US IRS today confirmed that, beginning February 16, the US competent authority will accept applications for Indian advance pricing agreements (APAs), citing improved relations between the countries due to the successful resolution of cases under an India/US framework agreement.
India had announced the US decision to restart India/US bilateral APA negotiations last Thursday.
The US will accept APA applications “covering information technology-enabled services, software development services, or other issues for whose resolution transfer pricing principles are relevant,” the IRS said.
“We appreciate the efforts of the Indian Competent Authority and his team, as well as the IRS team, for working to reach common understandings and procedures for resolving differences fairly,” said IRS Commissioner John Koskinen.
The move reveals a big turnaround in relations between the US and India concerning tax matters. In 2013, just after India launched its APA program, the US competent authority publicly declared a halt in negotiations with their Indian counterparts on transfer pricing matters, claiming that the Indian side was not engaging in principled negotiation. Since that time, the US refused to negotiate bilateral APAs with India.
Last year the countries agreed to transfer pricing framework in an attempt to resolve over 200 pending transfer pricing cases in the information technology services and information technology enabled services segments. The Indian government announced that as of last week, 100 of these cases have been resolved.
Related MNE Tax articles:
Be the first to comment