Advance pricing agreement to provide clarity about tax

MUMBAI: The introduction of advance pricing agreement( APA) regime would provide clarity to the tax payers, a senior government official said here today.

"The introduction of the APA is a very interesting step taken by the department. The APA is an endeavour of the department to provide tax certainty to the tax payer as it reduces risk of double taxation and provides added clarity to the taxpayer," Transfer Pricing and APA Additional Commissioner Vikram Batra said at a CII event here today.

The Central Board of Direct Taxes ( CBDT) had recently announced guidelines for APAs, which would help reduce disputes about transfer pricing between tax authorities and multinational corporations.

APA rules will allow companies to seek guidance on pricing of goods and services in advance to reduce transfer pricing tax disputes.