Towards Greater Tax Certainty: Decoding India's APA and MAP Performance in FY 2025-26
The Advance Pricing Agreement (APA) programme has evolved into a key pillar of India’s transfer pricing (TP) framework, fostering a more transparent and predictable tax environment for multinational enterprises. A significant development during financial year (FY) 2025-26 was the enactment of the Income-tax Act, 2025, which replaced the six-decade-old Income-Tax Act, 1961, with a modern, simplified, and taxpayer-centric legislative framework. In line with this broader objective, several reforms were introduced within the APA regime to enhance operational efficiency, streamline procedures, promote consistency in APA administration, and strengthen certainty for taxpayers. These measures are expected to further improve compliance ease, reduce administrative complexity, and reinforce the APA programme’s role as an effective mechanism for dispute prevention and tax certainty.
With reforms coming in India’s APA Programme, the Central Board of Direct Taxes (CBDT) achieved a historic milestone in FY 2025-26, recording its highest-ever performance with 220 APAs signed during the year.
The release of the 8th Annual Report on the APA Programme for FY 2025-26 highlights the continued success of the programme, with a growing number of APAs signed, reflecting its increasing popularity and widespread acceptance among taxpayers. Further underscoring its success, the Organisation for Economic Co-operation and Development (OECD) recognized India’s APA Programme in 2025 as the third-fastest-growing APA programme globally.
