The Central Board of Direct Taxes (CBDT) released the Advance Pricing Agreement (APA) Programme Annual Report 2024–25, outlining the progress of India’s APA framework under the Income Tax Department. The APA programme, introduced in 2012, aims to provide tax certainty and reduce transfer pricing disputes for multinational enterprises (MNEs) by determining arm’s length pricing in advance. As of March 2025, the CBDT has signed a total of 815 APAs, including 615 unilateral and 200 bilateral or multilateral agreements. During FY 2024–25 alone, 174 new APAs were signed—the highest in any financial year—of which 65 were bilateral, including one multilateral agreement. These agreements were concluded with countries such as Australia, Japan, Singapore, South Korea, the Netherlands, the UK, and the US.
The APA framework operates under sections 92CC and 92CD of the Income Tax Act, 1961, supported by Rules 10F to 10T of the Income Tax Rules. It offers both unilateral and bilateral agreements, with rollback provisions allowing applicability for up to nine years. The report credits the continued success of the APA programme to effective collaboration between the CBDT, the Foreign Tax & Tax Research Division, APA teams, and participating taxpayers.
The Chairman of CBDT, Ravi Agrawal, and Member (Legislation), R.N. Parbat, acknowledged the contribution of officers and taxpayers in maintaining the programme’s efficiency and transparency. The report underscores India’s efforts to enhance ease of doing business and maintain a non-adversarial tax environment while identifying areas for improvement and further stakeholder engagement.
Income Tax Department
Advance Pricing Agreement (APA) Programme of India ANNUAL REPORT (2024-25)
Central Board of Direct Taxes
Department of Revenue, Ministry of Finance, New Delhi
September, 2025
Foreword by the Chairman, CBDT
The Advance Pricing Agreement (APA) programme of the CBDT, is one of its leading programmes for fostering a tax regime in India that provides an investor conducive environment. 815 APAs have been entered into by the CBDT till March, 2025, which demonstrates the widespread acceptance of the programme by taxpayers and stakeholders alike. In continuation of the exemplary performance last year, the programme was successfully taken forward in FY 2024-25, and witnessed one of the highest number of APA signings in any single year since the commencement of the APA programme.
Over more than a decade long period of its existence, the APA programme has contributed significantly to the Government of India’s mission of promoting ease of doing business, especially for Multi-National Enterprises (MNEs), which have transactions spanning across borders, within their group entities. Each signed APA brings tax certainty for a taxpayer that spans multiple years. The APAs signed till date have cumulatively brought about certainty to taxpayers for more than 4,400 Assessment Years.
Apart from running the Unilateral leg of the APA programme successfully, the CBDT has also actively engaged with its various tax treaty partners to negotiate and enter into Bilateral APAs, which provide taxpayers an added benefit of relieving double taxation and providing tax certainty in both treaty partner jurisdictions. The year also saw a record number of bilateral agreements signed, which is also a testament to the strengthening of our relationship with taxpayers and treaty partner countries.
As we release this Report, I would like to place on record my appreciation of the hard work and dedication of the officers in the Foreign Tax & Tax Research Division of the CBDT and the officers in the APA teams under Principal CCIT (International Taxation). I would also like to thank the taxpayers for being equal and active partners in the success of this programme. CBDT will continue to strive towards further increasing the efficacy of the APA programme and attain more expedient outcomes going forward. All feedback/suggestions on this Report are welcome, and will help us in further strengthening the APA programme.
Ravi Agrawal
Chairman, Central Board of Direct Taxes
Ministry of Finance, Government of India
Preface by Member (L), CBDT
The Advance Pricing Agreement (APA) programme was introduced in India through the Finance Act, 2012 with a view to fulfil the objectives of tax certainty and double taxation avoidance – two key focus areas of the CBDT for several years now. Being founded on principles of mutual co-operation and trust between taxpayers and revenue authorities, the programme has strengthened the Indian tax administration’s orientation of enabling and empowering, the growth of our taxpayers.
The programme has constantly strived for a meticulous, positive, fact-intensive and collaborative perspective on transfer pricing, aided by consultation and a desire on convergence and acceptability of outcomes. Thus, a more cooperative rather than adversarial approach, forms the cornerstone of the APA programme.
It gives me immense pleasure to present this seventh Annual Report (for FY 2024-25) of the Indian APA programme. This Annual Report presents abundant numerical data and detailed analysis that confirms the immense popularity and acceptability of the APA programme in India. The year FY 202425 in particular has been one of resounding success for the programme with several milestones in terms of number of signings surpassed in unilateral as well as bilateral agreements.
I would like to congratulate the officers in the Foreign Tax & Tax Research Division of the CBDT and the APA teams under Principal CCIT (International Taxation) for their successful work. This financial year has been a record-breaking year for the APA programme in many respects, with one of the highest number of signings in any year in the history of the programme, for which I would like to put on record my special appreciation for the dedication and hard work of the officers, as well as the positive support extended by taxpayers and tax consultants. In particular, I would also like to thank our taxpayers for reposing their faith in the APA programme and extending their full-fledged cooperation in ensuring that the programme continues to be a success.
R. N. Parbat
Member (Legislation), Central Board of Direct Taxes
Ministry of Finance, Government of India
Chapter 1: APA Programme of India – Introduction
An Advance Pricing Agreement (APA) is an agreement between the tax administration and a person (taxpayer), which determines, in advance, the Arm’s Length Price (ALP) or specifies the manner of the determination of ALP (or both), in relation to an international transaction1. APA programmes are operational in a number of countries for a long time. The primary goal of such programmes is to provide certainty to taxpayers in respect of the pricing of cross-border transactions undertaken by taxpayers with their group entities.
Unprecedented growth in international trade involving cross-border transactions within group entities has given rise to numerous tax disputes on the issue of transfer pricing. An APA is a mechanism to resolve transfer pricing disputes in advance, i.e., before the cross-border related party transaction actually takes place or, at least, before a dispute arises in respect of such cross-border transaction. The transfer price of goods and services transacted between group entities is decided in advance by the tax authorities and the taxpayers, so as to prevent any dispute arising from such transfer pricing.
The APA programme is carried out in India with a legislative mandate under the Income-tax Act, 1961. It was launched in 2012 through the insertion of sections 92CC and 92CD in the Income-tax Act, 1961 by the Finance Act, 2012. These statutory provisions, effective from 1st July, 2012, lent the legal backing to the CBDT to enter into APAs with taxpayers for a maximum period of 5 years in respect of international transactions between Associated Enterprises (AEs) to determine the ALP or to specify the manner in which the ALP is to be determined.
Vide notification no. 36/2012 [F. No. 133/5/2012-SO(TPL)]/SO 2005 (E), dated 30th August, 2012, the APA Scheme [Rules 10F to 10T] was inserted in the Income-tax Rules, 1962 to operationalize the APA programme. Thus, the Indian APA programme, which commenced from 1st July, 2012, became fully functional and operational from 30th August, 2012 with the notification of the rules. The rules deal with the various procedural aspects of the APA process, including procedures for pre-filing consultation application; pre-filing consultation; payment of fees; filing of APA application; processing of APA application; withdrawal of APA application; terms and conditions of APA; filing of Annual Compliance Report; Compliance Audit; revision, cancellation and renewal of APA; etc.
Rollback provisions allow the ALP or the methodology for determining the ALP as agreed to in the APA, to be rolled back to a period prior to the commencement of the APA. Roll-back of APAs was announced by the Government on 10th July, 2014. The necessary legislative changes in this regard were carried out through the Finance (No. 2) Act, 2014. The amendment to the Income-tax Rules, 1962 for implementing the Roll-back provisions were notified on 14th March, 2015 and the existing APA Scheme got amended accordingly. The Rollback provisions are applicable for a maximum of four years prior to the first year of the APA period. Thus, a taxpayer would be able to have certainty in matters of transfer pricing for a maximum period of 9 years at any one time by applying for an APA with Rollback provisions. Circular No. 10 of 2015 was issued by the CBDT on 10th June, 2015 to provide clarity on Rollback issues in the form of answers to FAQs.
Under the Indian APA programme, APAs can be unilateral, involving the CBDT only, or bilateral/multilateral, involving CBDT and the tax authorities of another country. Bilateral APAs are based on Agreements entered into by the Competent Authority of India with the Competent Authority of the treaty partner jurisdiction, thereby extending tax certainty simultaneously in both the jurisdictions. Over the last 13 years, more than 2000 applications have been filed in India. About 70% of these are for unilateral APAs between the Indian taxpayer and the CBDT. Till 31st March, 2025, 815 Agreements have been entered into, of which 615 are unilateral (UAPA), whereas 200 are bilateral (BAPA) including one multi-lateral (MAPA).
The APA applications are processed and analysed by dedicated APA teams working under the overall supervision of Pr. CCIT (International Taxation), New Delhi. Each APA team is headed by a Principal Commissioner/Commissioner of Income-tax. The team also comprises Addl./Joint Commissioners of Income-tax and Deputy/Asst. Commissioners of Income-tax. Presently, there are five APA teams. These teams are based in Delhi, Mumbai, Bengaluru and Gurgaon.
In respect of unilateral APAs (UAPAs), the position papers developed by the APA teams are approved by the Pr. CCIT (International Taxation), New Delhi and sent to the CBDT for approval. In the CBDT, officers of the Foreign Tax & Tax Research Division examine and process the position papers/report received under Rule 10L. Joint Secretary, FT & TR-I and FT & TR-II review the examination done by the officers below them and further process the position papers before sending it for final approval of the designated Member of the CBDT. The Member approves the final negotiating position to be adopted by the APA teams. Once the negotiation is complete, a draft Agreement is sent to the CBDT for approval. Thereafter, the Agreement is entered into between the CBDT and the taxpayer.
In respect of bilateral APAs (BAPAs), once the position papers are sent to the FT & TR Division by the Pr. CCIT (International Taxation), the Competent Authority of India (Joint Secretary, FT & TR-I for countries in Europe, North America and Caribbean or Joint Secretary, FT & TR-II for other countries) initiates discussions with their counterpart in the other country. The officers in the FT & TR Division of the CBDT working with the Competent Authority prepare the position of the Indian Competent Authority. The same is shared with the Competent Authority of the other country. Once positions have been exchanged, the Competent Authorities of both countries discuss and negotiate the terms and conditions of the APA. If they reach an understanding, then a Mutual Agreement, containing the terms and conditions of the APA, is entered into by the Competent Authorities of both countries.
Thereafter, each country usually enters into an Agreement with its own taxpayer. On the Indian side, the terms and conditions of the Mutual Agreement are shared with the taxpayer and its concurrence is sought within 30 days. Once the taxpayer agrees to the resolution reached in the Mutual Agreement, a draft Agreement is prepared in consultation with the Indian taxpayer and the same is submitted for the approval of the designated Member in the CBDT.
For both UAPAs and BAPAs, the Agreements are entered into by either Joint Secretary, FT & TR-I or Joint Secretary, FT & TR-II (the two Competent Authorities of India) with the taxpayer, on behalf of the CBDT.
The seventh Annual Report on the APA programme highlights the progress made in financial year 2024-25. This has been another successful year for the APA programme. This year again, CBDT recorded the highest ever APA signings in any financial year since the launch of the APA programme, by signing a total of 174 APAs. This year, CBDT also signed the maximum number of BAPAs in any financial year till date, with the signing of 65 BAPAs, including one MAPA. The BAPAs were signed as a consequence of entering into Mutual Agreements with India’s treaty partners namely Australia, Japan, New Zealand, Singapore, South Korea, The Netherlands, the UK and the US. This was made possible by the relentless efforts of the CBDT and its officers working in the Foreign Tax & Tax Research Division and the APA teams under the Principal CCIT (International Taxation), and facilitated by coordinated efforts of all stakeholders in streamlining the processes, balancing standardization with flexibility and better team working synergies.
The CBDT acknowledges the cooperation and efforts of the taxpayers and their consultants in making the APA programme a success. CBDT also acknowledges the co-operation received from the Competent Authority teams of our treaty partner jurisdictions, particularly the United States, for the rise in the number of BAPAs signed.
The figure of 174 APAs is one of the highest ever number of APAs reported by any country till date in a tax year. 2 In India, APA reporting has traditionally been done on a financial year basis, which is same as its tax year, unlike most other countries that report it calendar year wise. It would be appropriate to note here that the number of 65 BAPAs signed by India is still far away from the BAPA figures reported by jurisdictions like United States and Japan. However, this figure has also risen considerably from 39 in FY 2023-24. The year also saw India signing its first MAPA, which can technically be considered a combination of several BAPAs that are agreed together in respect of a taxpayer having operations in multiple jurisdictions at the same time. This points towards the untapped potential that this programme still holds, as well as direction in which it may evolve in years to come.
This Annual Report carries forward the CBDT’s unique initiative to bring into the public domain various statistical and qualitative aspects of India’s APA programme. The purpose of this exercise is to transparently put forward all aspects, including those that indicate that there is still a great scope for further improvements in this programme, and encourage discussion and debate amongst taxpayers, policy makers, and economists, among others, on its strengths and weaknesses. This Annual Report also underlines the importance that the APA programme holds in the Government’s endeavour to promote and preserve a non-adversarial tax regime by working with the stakeholders.
Notes:
1Advance Pricing Agreement Guidance with FAQs released as part of Taxpayer Information Series No. 43
2 Some countries with leading APA numbers have not yet made their reports public, and this assertion is subject to the numbers they may report for a year already completed.
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