A record 219 Advance Pricing Agreements (APAs) were entered into by the Central Board of Direct Taxes (CBDT) with Indian taxpayers in FY 2025-26, bringing the total to 1,034 APAs since the program’s start, according to an official statement released on Tuesday.
This number includes 284 bilateral APAs and 750 unilateral APAs.
The 13 treaty partners with which India has entered into BAPAs are as follows: the United States, Finland, the United Kingdom, Singapore, Japan, South Korea, Australia, Denmark, Sweden, France, Indonesia, Ireland, and New Zealand. Importantly, India has signed its first-ever bilateral APAs with Sweden, France, Ireland, and Indonesia this year. According to the statement, the CBDT has a history of signing a large number of APAs. In the previous fiscal year, 174 APAs were concluded, and in the year prior, 125 APAs were concluded.
To get transfer pricing certainty more quickly and at a lower cost, Safe Harbour Rules are a nice addition to the APA framework. With its introduction in 2013, the Safe Harbour framework established predetermined margins for certain types of cross-border transactions. Twelve types of transactions are currently covered by the regime: IT and software services, IT-enabled services, KPO, contract research and development, intra-group financing, guarantees, auto components, low-value-adding services, and some diamond industry activities.
The Safe Harbour Rules have been substantially improved with the introduction of the Finance Act 2026. The formerly separate “Information Technology Services” category now has a consistent 15.5% margin across all technology service sectors. The previous threshold of Rs 300 crore has been raised to Rs 2,000 crore. There will be less need for administrative interface and extensive scrutiny thanks to the modifications’ introduction of a more system-driven and automated framework.
By outlining pricing methodologies and predicting the arm’s length price of foreign transactions in advance for a period of up to five years, the APA Scheme and Safe Harbour Rules seek to offer taxpayers with assurance in the field of transfer pricing. Additional protection against real or possible double taxation is provided by BAPAs.
