Infosys signs tax pact for US operations

In order to gain predictability for the tax outgoings of its US operations, India's IT major, Infosys has signed an Advance Pricing Agreement (APA) with the U.S. tax authority.
 
Under the APA methodology, Infosys and the U.S. Internal Revenue Service (IRS) have agreed to allocate revenues and calculate the tax obligations for its U.S. operations. This agreement will be applicable for the fiscal years 2011 to 2021. The initiation of this agreement with the IRS began in 2015. 

Due to this agreement, the company expects a reversal of tax provisions of approximately US$ 225 million in Q3FY17. The reversal will have a positive impact on the consolidated Basic EPS for Q3FY17. Also, the company expects its overall effective tax rate to go down by around 100 basis points for future periods. 

Also, Infosys is scheduled to announce Q3 results on Friday, January 12. At 10:41 hours, the stock of Infy was quoting Rs. 1,037.00 per share, down by 0.41 per cent.