APA Annual report
APA Annual Report FY 2019-20 to 2021-22 and FY 2022-23
The CBDT has recently released the 4th and 5th Advance Pricing agreement (APA) annual report for the period FY 2019-20 to 2021-22 and FY 2022-23 respectively. FY 2021-22 marks completion of first decade of the APA programme. APA is one of the foremost tools relied by taxpayers and taxauthorities alike in dispute resolution for transferpricing cases.
APA provides tax certainty through consensus on the arm’s length price (ALP) agreed by taxpayers and tax authority (CBDT in case of India). APA can be a unilateral (UAPA)– where taxpayer enters into agreement with the tax authority of its jurisdiction or bilateral (BAPA)– APA entered into between the taxpayers, the tax authority of the host country and the foreign tax administration
BAPA provide wholistic or complete dispute resolution as it is agreed by tax authorities of both taxpayers and its AE. Jurisdictions where the APA programme is matured usually witness greater BAPA application than UAPA.
The key aspects and insights of the 4th and 5th APA annual report is captured in the below alert including:
A) APA Applications
B) APA Conclusions
C) UAPA related statistics
D) BAPA related statistics
India ’s APA programme is maturing over the decade with increase in the pace of conclusions – both UAPA and BAPA as well as increase adoption of BAPA through change in UAPA:BAPA ratio.
Global dispute resolution landscape, especially in transfer pricing, is evolving. Taxpayers will have to be mindful of these global developments such as AmountB of PillarOne while formulating their strategy on dispute resolution w.r.t. transfer pricing.