India to ink 29 bilateral MNC tax deals in sign of softening stance

Aug 30 2013, 08:31 IST
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SummaryNew Delhi is set to sign bilateral deals with the tax authorities in the US, UK and Japan.

profit margins fall, while the agreement broadly guarantees certainty about tax liability for five years.

The automobile industry, for example, is going through a contraction in sales in Europe. If the critical assumptions used in arriving at the arms length price of a transaction between Indian and overseas units of an MNC change significantly, the proposed APAs could be renegotiated, said a person privy to the development.

A change in the agreement could be resorted to if the operational profits of the Indian units either go up or down leading to a more than anticipated change in the tax liability in India. The US was earlier unwilling to enter into bilateral APAs with India saying it cannot accept the valuation US companies agree with India on their cross-border transactions with the Indian units.

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