Advance pricing pacts hit new high of 174 in FY25

THE CENTRAL BOARD of Direct Taxes (CBDT) has signed 174 Advance Pricing Agreements (APAs) during 2024-25, the highest in any year, indicating the progress in ease of doing business by providing certainty to multinationals regarding transfer pricing.

- FE BUREAU

The service sector has been the top beneficiary as around 60% of total APAs signed during 2024-25 pertain to the sector alone, according to the 7th APA Annual Report released by the CBDT.

The spurt in bilateral APAs is the result of a special drive by the CBDT, sources said.

Bilateral APA aims to prevent double taxation and provide tax certainty in both the jurisdictions of treaty partners. Notably, bilateral APAs were losing popularity in the last few years due to the huge time involved in negotiation among treaty partners.