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CBDT Signs Record 219 Advance Pricing Agreements In FY26, Total Crosses 1,000 Mark
(MENAFN- KNN India)
New Delhi, Apr 1 (KNN) The Central Board of Direct Taxes (CBDT) has signed a record 219 Advance Pricing Agreements (APAs) with Indian taxpayers in FY 2025-26, marking the highest number concluded in a single financial year since the programme's inception.
With this, the total number of APAs signed by CBDT has crossed the 1,000 mark, reaching 1,034 agreements, including 750 unilateral APAs (UAPAs) and 284 bilateral APAs (BAPAs).
Surge in Bilateral Agreements
Out of the total, 84 were bilateral APAs, surpassing last year's record of 65. These agreements were concluded through mutual agreements with 13 of India's tax treaty partners, including the US, UK, Japan, Singapore, Australia, and France.
Notably, FY26 also saw India sign its first-ever bilateral APAs with France, Ireland, Indonesia, and Sweden. CBDT has maintained a steady upward trend in APA signings, with 174 agreements in FY25 and 125 in FY24.
Enhancements to Safe Harbour Rules
The APA framework is complemented by Safe Harbour Rules, introduced in 2013, which provide a simplified and cost-effective mechanism for transfer pricing compliance.
Recent amendments under the Finance Act 2026 have significantly expanded the scope and ease of these rules. Key changes include consolidation of multiple tech service categories into a single 'Information Technology Services' segment with a uniform 15.5 percent margin, increase in eligibility threshold from Rs 300 crore to Rs 2,000 crore and introduction of a more automated, system-driven compliance framework.
The Safe Harbour regime now covers 12 categories of international transactions, including IT services, KPO, contract R&D, intra-group financing, and auto components.
Boost to Tax Certainty
The APA programme allows taxpayers to determine transfer pricing methods in advance for up to five years, ensuring certainty and reducing disputes. Bilateral APAs further help in avoiding double taxation by aligning pricing arrangements between two tax jurisdictions.
CBDT stated that the growing adoption of APAs reflects increasing trust among taxpayers and underscores the government's commitment to providing a stable and predictable tax environment.
(KNN Bureau)
With this, the total number of APAs signed by CBDT has crossed the 1,000 mark, reaching 1,034 agreements, including 750 unilateral APAs (UAPAs) and 284 bilateral APAs (BAPAs).
Surge in Bilateral Agreements
Out of the total, 84 were bilateral APAs, surpassing last year's record of 65. These agreements were concluded through mutual agreements with 13 of India's tax treaty partners, including the US, UK, Japan, Singapore, Australia, and France.
Notably, FY26 also saw India sign its first-ever bilateral APAs with France, Ireland, Indonesia, and Sweden. CBDT has maintained a steady upward trend in APA signings, with 174 agreements in FY25 and 125 in FY24.
Enhancements to Safe Harbour Rules
The APA framework is complemented by Safe Harbour Rules, introduced in 2013, which provide a simplified and cost-effective mechanism for transfer pricing compliance.
Recent amendments under the Finance Act 2026 have significantly expanded the scope and ease of these rules. Key changes include consolidation of multiple tech service categories into a single 'Information Technology Services' segment with a uniform 15.5 percent margin, increase in eligibility threshold from Rs 300 crore to Rs 2,000 crore and introduction of a more automated, system-driven compliance framework.
The Safe Harbour regime now covers 12 categories of international transactions, including IT services, KPO, contract R&D, intra-group financing, and auto components.
Boost to Tax Certainty
The APA programme allows taxpayers to determine transfer pricing methods in advance for up to five years, ensuring certainty and reducing disputes. Bilateral APAs further help in avoiding double taxation by aligning pricing arrangements between two tax jurisdictions.
CBDT stated that the growing adoption of APAs reflects increasing trust among taxpayers and underscores the government's commitment to providing a stable and predictable tax environment.
(KNN Bureau)
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