New Delhi, March 31 The Central Board of Direct Taxes (CBDT) has entered into a record 219 Advance Pricing Agreements (APAs) in FY 2025-26 with Indian taxpayers, taking the total number past the 1,000 mark to an aggregate of 1,034 APAs since the inception of the programme, according to an official statement issued on Tuesday.
The figure comprises 750 unilateral APAs (UAPAs) and 284 bilateral APAs (BAPAs).
The BAPAs were signed pursuant to entering into mutual agreements with 13 of India’s treaty partners, namely the US, Finland, the UK, Singapore, Japan, South Korea, Australia, Denmark, Sweden, France, Indonesia, Ireland, and New Zealand. Notably, this year also marks the achievement of signing India’s first-ever bilateral APAs with France, Ireland, Indonesia, and Sweden. The CBDT has consistently been signing a high number of APAs, having concluded 174 APAs in the previous financial year, and in the year before that, 125 APAs were concluded, the statement said.
Safe Harbour Rules complement the APA framework by offering a faster, lower-cost alternative for achieving transfer pricing certainty. Introduced in 2013, the Safe Harbour framework prescribes fixed margins for specified categories of international transactions. The regime currently spans twelve transaction categories, including IT and software services, IT-enabled services, KPO, contract R&D, intra-group financing, guarantees, auto components, low-value-adding services, and certain transactions in the diamond industry.
The Finance Act 2026 has introduced significant enhancements to the Safe Harbour Rules. Multiple technology service segments have been consolidated into a single "Information Technology Services" category with a uniform 15.5 per cent margin. The eligibility threshold has been increased from Rs 300 crore to Rs 2,000 crore. The amendments also introduce a more system-driven and automated framework, reducing the need for detailed scrutiny and administrative interface.
The APA Scheme, together with Safe Harbour Rules, aims to provide certainty to taxpayers in the area of transfer pricing by specifying pricing methods and determining the arm's length price of international transactions in advance for up to five years. BAPAs offer the added benefit of protection against potential or actual double taxation.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor