Feb 1, 2016
The tax authorities in India have signed the first two bilateral advance pricing agreements (APAs) with the United Kingdom, with respect to transactions concerning management charges and brand royalty.
These bilateral APAs are the first bilateral resolutions of issues on management charges and brand royalty. The taxpayer companies also recently concluded mutual agreement procedures (MAPs) with the UK tax authorities on the same set of transactions. The bilateral APAs are viewed as allowing the tax authorities and the taxpayer companies of a UK based group engaged in manufacturing of automotive and industrial components to avoid some seven years of potential litigation.