86. Consider the following statements related to advance pricing agreement (APA),

1. An advance pricing agreement (APA) is an agreement between a taxpayer and a tax authority on an appropriate transfer pricing methodology.

2. This agreement is made so that a potential seller does not hike price of goods and services.

Select the correct answer using the code given below.

a) 1 only

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b) 2 only

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c) Both 1 and 2

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d) Neither 1 nor 2

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Solution

The correct option is A
a) 1 only

Answer- a

The sole objective of the APA is to bring tax certainty in international transactions and overcome the issues due to transfer pricing between related parties.

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Similar questions

Q12. Consider the following statements about Advance Pricing Agreement:

1. APA scheme endeavours to provide certainty to taxpayers in domain of transfer pricing by specifying methods of pricing and setting prices of international transactions in advance.

2. It helps in determining arm’s length price of international transactions in advance for max period of 5 future years.

Which of the above statements are incorrect?

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Select the correct answer using the code given below:

1 only
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Q. What is the advanced pricing agreement? How will it bring down Tax litigations?

With which country has the CBDT(Central Board of Direct Taxes) recently entered into 2 Bilateral APAs (Advance Pricing Agreements)?

Q. Which of the following is/are the modes of negotiations under the General Agreement on Trade and Services (GATS)?

Select the correct answer using the codes given below:

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1, 3 and 4
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The correct option is A a) 1 only Answer- a The sole objective of the APA is to bring tax certainty in international transactions and overcome the issues due to transfer pricing between related parties.

The correct option is A
a) 1 only

Answer- a

The sole objective of the APA is to bring tax certainty in international transactions and overcome the issues due to transfer pricing between related parties.