Even before reaching the milestone of the 13th anniversary of the Advance Pricing Agreement (APA) regime in India, CBDT achieved another milestone of signing 174 APAs in a given financial year (FY 24-25), with 34 APAs signed on a single day. This year also marked the year India entered into the first-ever Multilateral APA.
A significant increase of 40% in FY 24-25 vis-à-vis 30% in FY 23-24* was reflected wherein 174 APAs (108 Unilateral, 65 Bilateral, and 1 Multilateral) were entered in FY 24-25 making the total count 815 APAs (615 Unilateral, 199 Bilateral, and 1 Multilateral) as on date
The highest number of Bilateral APAs were finalized in FY 24-25 as a result of Mutual Agreements with treaty partners, namely Australia, Japan, South Korea, The Netherlands, New Zealand, Singapore, the UK, and the US.
The APA program has been proven to be an effective tool for dispute resolution since its inception. With Unilateral APAs, an increasing trend in the Bilateral APAs is also reflected considering FY 24-25 had the highest number of Bilateral APAs finalized in any given financial year.
As per the recently published report on the APA program in the USA, 143 APAs were signed in 2024, i.e., the second highest executed APAs in a given year by the USA. Japan (32%) and India (26%) accounted for the two top countries with Bilateral APAs with the USA.
CBDT has been setting the bar high each and every year, showcasing its commitment to providing tax payer with tax certainty and proactively resolving tax disputes. This has significantly contributed to the Government's mission to enhance the ease of doing business, especially for cross border transactions with the MNEs.
*Refer our alert on the 6th APA Annual Report Click here.
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