New Delhi, April 16 (IANS): Central Board of Direct Taxes (CBDT) has entered into a record number of 125 Advance Pricing Agreements (APAs) in 2023-24 with taxpayers as part of the government’s policy to promote ease of doing business, especially for big multinational companies which have a large number of cross-border transactions within their group entities.

“This marks the highest ever APA signings in any financial year since the launch of the APA programme. The number of APAs signed in FY 2023-24 also represents a 31 per cent increase compared to the 95 APAs signed during the preceding financial year,” according to a CBDT statement.

With this, the total number of APAs since the inception of the APA programme has gone up to 641.

The increased number of agreements were signed as a consequence of entering into mutual agreements with India’s treaty partners namely Australia, Canada, Denmark, Japan, Singapore, the UK and the US.

The APA Scheme provides certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and determining the arm’s length price of international transactions in advance for a maximum of five years in the future.

Further, the taxpayer has the option to rollback the APA for four preceding years, as a result of which, tax certainty is provided for nine years.

The signing of bilateral APAs additionally provides taxpayers with protection from any anticipated or actual double taxation.