CBDT relaxes norms for MAP & APAs
PrintListen to this Article
The clarification would likely encourage more MAPs and provide consistency in the country’s direct tax regime, experts said.
APAs and MAP are tools of alternative tax dispute resolution mechanism in matters involving transfer pricing.
The ‘corresponding adjustment’ clause in transfer pricing matters provides that if tax demand is raised on a company by a DTAA-signatory country, the revenue authorities in India would reduce the tax liability of the parent company based in India.
“Clarification of India’s position on DTAAs where Article 9(2) (corresponding adjustment) was absent is certainly a welcome news and strengthens the government’s resolve of fostering a non-adversarial tax regime. This will open the gates for many bilateral APAs and MAP cases. This sends out a positive signal and assures India Inc’s resolve to counter the pending litigation in an efficient manner,” Nitin Narang, executive director of transfer pricing at Nangia & Co, said.
The CBDT was responding to several references received by it on the issue. Although OECD has clarified in its model convention on tax treaties, which is the basis of transfer pricing agreements, that the absence of ‘corresponding adjustment’ in DTAAs doesn’t stop two contracting states to apply the provision, CBDT had earlier said the absence of the clause would mean the benefit can’t be extended to companies and hence MAP applications couldn’t be accepted .
“…it has been decided to accept transfer pricing MAP and bilateral APA applications regardless of the presence or otherwise of Paragraph 2 of Article 9 (or its relevant equivalent Article) in the DTAAs,” CBDT said. #casansaar (Source - Financial Express, Indian Express)
Category : CBDT | Comments : 0 | Hits : 636
The Central Board of Direct Taxes (CBDT), has issued Circular No. 07/2024 dated 25.04.2024 further extending the due date for filing Form 10A/ Form 10AB under the Income-tax Act, 1961 (the ‘Act’) upto 30th June, 2024. CBDT had earlier extended the due date for filing Form 10A/ Form 10AB by trusts, institutions and funds multiple times to mitigate genuine hardships of the taxpayers. The last such extension was made by Circular No. 06/2023 extending the date to...
Certain instances of mismatch of information as filed by the taxpayer and as available with the Income Tax Department have come to the notice of the Department as part of its routine exercise of verification of data. In such cases, the Department has alerted the taxpayers to enable them to take corrective action. However, some posts on social media, as well as articles in the media, have highlighted enquiries initiated by the Central Board of Direct Taxes (CBDT) in cases where employees have mad...
The Central Board of Direct Taxes (CBDT) has said the Income Tax department can file appeals irrespective of monetary threshold in cases relating to TDS/TCS, undisclosed foreign income, or information received from investigating agencies like ED and GST Intelligence. As per the present rules, tax authorities are allowed to file appeals before the ITAT, High Court and Supreme Court, if the disputed tax demand exceeds Rs 50 lakh, Rs 1 crore and Rs 2 crore, respectively. These thresholds were fi...
Income of any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in specified sub-clauses of section 10 (23C) of the Income-tax Act, 1961 (the ‘Act’) or any trust or institution registered under section 12AA/12AB of the Act is exempt, subject to fulfilment of certain conditions specified under various sections of the Act. One of the conditions required to be fulfilled by the tru...
Central Board of Direct Taxes (CBDT) on Monday ordered withdrawal of small tax demands that finance minister Nirmala Sitharaman had announced in her FY25 budget speech to improve ease of living. CBDT said that tax demand up to ?25,000 for assessment year up to 2010-11 and demands up to ?10,000 from the next year up to assessment year 2015-16 will be extinguished. However, any criminal action initiated or planned under any law will not be dropped. Any tax demand raised against taxes collect...
Comments