The Central Board of Direct Taxes (CBDT) has signed two more unilateral Advance Pricing Agreements (APAs).The two APAs signed pertain to chip design/development of embedded software and information technology (software development) sectors of the economy.

One of the two APAs have a rollback facility, an official release said. The number of APAs signed in the current financial year stood at four.

An APA is an agreement between a corporate taxpayer and the tax authority on its transfer pricing methodology and the tax rate applicable on inter-company transactions. It helps avoid disputes with tax authorities over transfer pricing.

The APA scheme, which was introduced in 2012, tries to provide certainty to taxpayers in transfer pricing by specifying the method of pricing and setting the prices of international transactions in advance.