Government of India is planning to come with the APAs rules.
APA is Advance Pricing Arrangements, an agreement between taxpayer & tax authorities to compute transfer prices in advance for transaction within a group company. To reach this agreement, Company submits its detailed information about costs and margins to the tax authorities’ .Based on the comparison of the submitted information with the similar arms length transaction, tax authorities give their decision.
Benefits of APAs for taxpayers
· APAs give taxpayers certainty about their prices for their related party transactions.
· It reduces the litigation and trouble for the taxpayer.
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