Advance pricing agreements set binding methods to determine arm's length price and attributable income for international transactions.

Clause 44 empowers the Board, with Central Government approval, to enter into advance pricing agreements that determine the arm's length price for international transactions or specify how to determine income reasonably attributable to operations in India of a non-resident; such agreements may use methods under transfer pricing provisions or rules with adjustments, are binding notwithstanding other transfer pricing provisions, and may cover determination for up to four prior years, subject to prescribed conditions and procedures.

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