CBDT Signs Record 219 Advance Pricing Agreements
ECONOMY & POLICY

CBDT Signs Record 219 Advance Pricing Agreements

The Central Board of Direct Taxes (CBDT) has entered into a record 219 Advance Pricing Agreements (APAs) in FY 2025–26, taking the total since inception to 1,034. The total comprises 750 Unilateral APAs and 284 Bilateral APAs. The annual figure is the highest since the scheme began and follows 174 APAs in the prior year and 125 APAs in the year before.

This year CBDT concluded 84 bilateral APAs, surpassing the previous record of 65, and these were completed through mutual agreements with 13 treaty partners including the United States, the United Kingdom, Japan and Singapore. India also recorded its first bilateral APAs with France, Ireland, Indonesia and Sweden, expanding international cooperation.

The APA Scheme enables taxpayers to determine transfer pricing methods and arm's length prices for international transactions in advance for up to five years, and bilateral agreements provide protection against double taxation. Safe Harbour Rules offer a faster, lower-cost route to transfer pricing certainty and cover twelve transaction categories including information technology services and contract research and development.

The Finance Act 2026 consolidated multiple technology service segments into a single Information Technology Services category and set a uniform margin of 15.5 per cent, streamlining applicability. Amendments introduced a more system-driven and automated approach to reduce detailed scrutiny and administrative interface. The combined measures are expected to improve efficiency, transparency and compliance.

The Finance Act 2026 raised the Safe Harbour eligibility threshold from Rs three billion (bn) to Rs 20 billion (bn), expanding the regime for larger taxpayers. Authorities anticipate that the higher threshold and automation will enhance ease of doing business by reducing time and cost burdens on compliant entities. CBDT stated that taxpayers remain key stakeholders in the APA programme's implementation.

The Central Board of Direct Taxes (CBDT) has entered into a record 219 Advance Pricing Agreements (APAs) in FY 2025–26, taking the total since inception to 1,034. The total comprises 750 Unilateral APAs and 284 Bilateral APAs. The annual figure is the highest since the scheme began and follows 174 APAs in the prior year and 125 APAs in the year before. This year CBDT concluded 84 bilateral APAs, surpassing the previous record of 65, and these were completed through mutual agreements with 13 treaty partners including the United States, the United Kingdom, Japan and Singapore. India also recorded its first bilateral APAs with France, Ireland, Indonesia and Sweden, expanding international cooperation. The APA Scheme enables taxpayers to determine transfer pricing methods and arm's length prices for international transactions in advance for up to five years, and bilateral agreements provide protection against double taxation. Safe Harbour Rules offer a faster, lower-cost route to transfer pricing certainty and cover twelve transaction categories including information technology services and contract research and development. The Finance Act 2026 consolidated multiple technology service segments into a single Information Technology Services category and set a uniform margin of 15.5 per cent, streamlining applicability. Amendments introduced a more system-driven and automated approach to reduce detailed scrutiny and administrative interface. The combined measures are expected to improve efficiency, transparency and compliance. The Finance Act 2026 raised the Safe Harbour eligibility threshold from Rs three billion (bn) to Rs 20 billion (bn), expanding the regime for larger taxpayers. Authorities anticipate that the higher threshold and automation will enhance ease of doing business by reducing time and cost burdens on compliant entities. CBDT stated that taxpayers remain key stakeholders in the APA programme's implementation.

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