CBDT signs agreement with Japanese trading company

Q.  CBDT entered into Bilateral APA with a Japanese trading company. What does APA stand for?
- Published on 05 Aug 16

a. Advance Pricing Authority
b. Advance Price Agreement
c. Advanced Price Agreement
d. Advance Pricing Agreement

ANSWER: Advance Pricing Agreement
 
Central Board of Direct Taxes has entered into a Bilateral Advance Pricing Agreement on 2nd August 2016 with an Indian subsidiary of the Japanese trading company.
  • This marks the first Bilateral APA with a Japanese company having a rollback provision.
  • Overall, it is the fourth bilateral APA signed by CBDT and signing of this bilateral APA helps in ascertaining certainty in transfer pricing matters of MNC cases and dispute resolution.
  • APA scheme was introduced as per the Income Tax Act in 2012 and the Rollback provisions were introduced in 2014

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