Monday, December 15, 2014

Advance Pricing-becoming reality

Mitsui, Toyota and Marubeni are likely to be among Japanese companies that would sign the first set of bilateral advance-pricing agreements (APA) with India shortly. These agreements will provide certainty to Japanese multinational firms operating in India and avoid conflicts over sharing of taxes between India and that country.

What is an APA?

An agreement between a taxpayer and the tax authority over the methodology to be used for computing the arm's-length price of transactions carried out among group firms

What are bilateral APAs?

Those involving a taxpayer, the Indian tax authority and a foreign tax authority

Which are the big firms locked in transfer-pricing disputes?

Vodafone, Shell, Microsoft, IBM, Maruti, Gillette, Bharti Airtel, Essar, Standard Chartered, HSBC
Securities & Capital Markets, Havells, Nokia.

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