Advance Pricing Agreement (APA) Transfer Pricing – International Taxation Case Study
Identify which of the APA can be entered into in the following cases : –
| Particulars | Country A | Country B | Country C |
| Indian Treaty | Yes | No | Yes |
| Relevant MAP Article | 25 | NA – However, Country B – USA Treaty has a MAP Article | No |
| APA Program in other country | Yes | Yes | Yes |
Advance Pricing Agreement (APA) Transfer Pricing – Solution:–
Request for bilateral or multilateral APA can be accepted by the Indian competent authority , where the following conditions are satisfied : –
a) India has a tax treaty (i.e., DTAA) with the Other Contracting State,
b) Such DTAA has an Article on ‘Mutual Agreement Procedure’ (MAP);
c) The other country also has a corresponding APA program
If these conditions are not satisfied, the BILATERAL OR Multilateral APA cannot be entered into. However, the taxpayer can still out for a unilateral APA.
| Particulars | Country A | Country B | Country C |
| Indian Treaty | Yes | No | Yes |
| Relevant MAP Article | 25 | NA – However, Country B – USA Treaty has a MAP Article | 26 |
| Unilateral APA | Yes | Yes | Yes |
| Multilateral APA | Yes | No – Since no Treaty exists | No – Since MAP Article does not exists |
| Bilateral APA | Yes | No – Since no Treaty exists | No – Since MAP Article does not exists |
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