What are some of the benefits of Advance Pricing Agreement(APA) ??
What are some of the benefits of Advance Pricing Agreement(APA) ??
Chiranjibi Aug. 27, 2018
An Advance Pricing Agreement provides the following benefits-
- Certainty with respect to tax outcome of the taxpayer’s international transactions, by agreeing in advance the arm’s length pricing or pricing methodology (ies) to be applied to the taxpayer’s international transactions covered by the APA;
- Removal of an audit threat (minimize rigours of audit), and deliverance of a particular tax outcome based on the terms of the agreement;
- Substantial reduction of compliance costs over the term of the APA; and
- For tax authorities, an APA reduces cost of administration and also frees scarce resources.
Consequently, APAs provide a win-win situation for all the stakeholders involved.
