Glad to share a recent press release by CBDT clarifying India’s position on the acceptance of MAP and bilateral APA in cases of countries where Article 9(2) of OECD Model Tax Commentary is absent.
As a background, India does not have Article 9(2) in its DTAAs with certain major trading partners including Belgium, Germany, France and Singapore. In the absence of Article 9(2), the Competent Authority of India had so far followed the practice of not admitting cases of economic double taxation under its MAP and as per the guidance note, the tax administration would apply similar position to the APA program. Pursuant to this press release, CBDT would accept applications for bilateral Advance Pricing Agreement (APA) and Mutual Agreement Procedures (MAP) for transfer pricing cases irrespective of existence of Article 9(2) in its tax treaty.
NASSCOM has been asking for a relaxation for the last few years and we are glad that our recommendations are considered. The press release is attached.