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U.S. and India Reach Transfer Pricing Agreement

March 23, 2015

Broad agreement reached is aimed at resolving most transfer pricing MAP cases in the IT and related services sector; May indicate openness of U.S. to India’s APA program.

The Indian tax department has been notably aggressive with its pursuit of transfer pricing related tax claims in recent years. The U.S. and India have reached a transfer pricing agreement that may resolve the majority of the two countries’ mutual agreement procedure cases related to transfer pricing in the IT and related services sector. Also, in a taxpayer favorable ruling, the High Court has held that India’s transfer pricing provisions may not be applied to tax a shortfall between the fair market value and issue price of shares of a company. The appearance of increased taxpayer friendliness could improve investors’ view of India.

For more details on the new agreement, read our article, “U.S. and India Reach Transfer Pricing Agreement” or contact any member of our Global Tax Services Team.

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