India - Expands Advance Pricing Agreement framework with bilateral coverage and Safe Harbour alignment

Summary

The Central Board of Direct Taxes (CBDT), in a press release dated March 31, 2026, reported the execution of Advance Pricing Agreements (APAs) under India’s transfer pricing framework, including expanded bilateral APA coverage under Mutual Agreement Procedures (MAP) and the alignment of the APA program with revised Safe Harbour Rules.

Key points

Number of APAs executed in FY 2025–26

The CBDT reported that a total of 219 APAs were entered into with taxpayers during financial year 2025–26.

Cumulative APA program statistics

With the inclusion of the FY 2025–26 agreements, the cumulative number of APAs concluded since the inception of the program reached 1,034, comprising:

• 750 unilateral APAs (UAPAs)

• 284 bilateral APAs (BAPAs)

Bilateral APA execution under MAP

Out of the 219 APAs executed in FY 2025–26, 84 were bilateral APAs.

These agreements were concluded through MAP with treaty partners.

Treaty partner coverage for BAPAs

The bilateral APAs were concluded with 13 treaty partners:

• United States

• United Kingdom

• Japan

• Singapore

• Australia

• France

• Finland

• South Korea

• Denmark

• Sweden

• Indonesia

• Ireland

• New Zealand

First-time bilateral APA jurisdictions

The FY 2025–26 agreements included the first bilateral APAs concluded by India with:

• France

• Ireland

• Indonesia

• Sweden

APA framework scope and application

The APA program provides for advance determination of:

• Transfer pricing methodologies; and

• Arm’s length price for international transactions

The agreements apply for a specified period as prescribed under the APA framework.

Safe Harbour Rules amendments under Finance Act 2026

The CBDT press release also refers to revisions to the Safe Harbour Rules introduced under the Finance Act 2026, including:

• A unified profit margin of 15.5% for certain IT and IT-enabled services;

• An increase in the applicability threshold from INR 300 crore to INR 2,000 crore; and

• The positioning of Safe Harbour provisions as a complementary mechanism alongside the APA program within the transfer pricing framework.

Source

Central Board of Direct Taxes, CBDT signs record 219 Advance Pricing Agreements (APAs) in FY 2025–26 (March 31, 2026)

https://pib.gov.in/PressReleasePage.aspx?PRID=2247399

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Disclaimer:

This content is for general informational purposes only and does not constitute professional advice.

Information provided herein is based on publicly available sources as of the publication date and may be subject to change.

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