LG Electronics India signs a long-awaited Advance Pricing Agreement with the Central Board of Direct Taxes, resolving transfer pricing issues for nine years and wiping out over ₹4.8 billion in contingent liabilities. The agreement brings clarity, reduces tax risks, and strengthens financial predictability for the company.
LG Electronics India announced that it has successfully concluded an Advance Pricing Agreement (APA) with the Central Board of Direct Taxes (CBDT) on January 5, 2026. The agreement covers the period from April 1, 2014, to March 31, 2023, and aims to provide certainty on the company’s transfer pricing arrangements with its parent, LG Electronics Inc., Korea.
The APA marks a major step in resolving historical tax disputes and ensuring long-term compliance under Indian transfer pricing laws.
Key Financial Impacts
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Contingent liabilities of ₹1,724.38 million related to direct taxes stand nullified.
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A further ₹3,153 million in royalty-related contingencies with LG Electronics Inc. also becomes nil.
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The company will incur a net tax expense of ₹177.12 million, excluding applicable interest.
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A secondary adjustment payment of ₹38.59 million is required to be made to LG Electronics Inc. in adherence to transfer pricing regulations.
This development is expected to strengthen LG’s tax governance framework and enhance financial transparency.
Source: Company filing on BSE, CBDT