Indian Revenue Prescribes Timelines For The Furnishing Of Country-By-Country Reporting (CbCR) In India By Indian Subsidiary/Constituent Entity In Notified Circumstances
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In India, CbCR filings have been made applicable from Financial Year 2016-17, modeled majorly on OECD's recommendations in Action Plan 13 of the BEPS project.
In India, CbCR filings have been made applicable from Financial
Year 2016-17, modeled majorly on OECD's recommendations in
Action Plan 13 of the BEPS project. The Indian regulations require
that CbCR is to be furnished by the ultimate parent entity (UPE) or
Alternate Reporting Entity (ARE) of an 'international
group' in the country or territory of its residence. Therefore,
Constituent entity resident in India whose parent is situated
outside India is not required to furnish CbCR in India, except in
following scenarios -
Scenario 1: Where
the parent entity is not obligated to file CbCR; or
Scenario 2: Where
the parent entity being a resident of a country or territory with
which India does not have an agreement providing for the exchange
of CbCR; or
Scenario 3: Where
there has been a systemic failure of the country or territory and
the same has been intimated by the prescribed authority to such
constituent entity.
While these situations existed, the law had not yet provided
clarity on the due date for filing such CbCR by the Indian Entity.
To address this, the Central Board of Direct Taxes (CBDT/apex tax
body in India) has vide notification dated 18 December 2018
prescribed timelines for furnishing CbCR by Constituent entity
resident in India as follows:
Scenario
Time-limit to furnish CbC Report
Scenario 1 and Scenario 2 referred to above
CbCR is required to be furnished within 12 months from the end
of the reporting accounting year. Example, if the accounting year
of UPE is ending on 31 December 2017, the Constituent entity
resident in India shall furnish CbCR on or before 31 December
2018.
Scenario 3
CbCR is required to be furnished six months from the end of the
month in which said systemic failure has been intimated by the
prescribed authority
Important
Notes
Scenario 1 could cover those
jurisdictions where CbCR filing has not been made mandatory during
the Year 2017 or before. Example, Switzerland and Hong Kong have
mandatory CbCR filing requirement for accounting year commencing
from 1 January 2018. Therefore, Constituent entity resident in
India whose parent is in Switzerland or Hong Kong may be required
to furnish CbCR in India for the reporting period say 1 January
2017 to 31 December 2017 and also 1 January 2016 to 31 December
2016.
Similarly, Scenario 2 could cover
jurisdictions such as the USA, which has not yet signed MCAA for
the exchange of CbCR with India. Accordingly, Constituent entity
resident in India whose parent is in the USA is required to furnish
CbCR in India for the reporting period 1 January 2017 to 31
December 2017 on or before 31 December 2018.
While the requirement to furnish the
CbCR in India in above scenarios was introduced by Finance bill
2016 itself, however, the timeline to furnish the CbCR was notified
as recent as yesterday (lag of nearly two years). This has lead to
a situation, wherein, the timelines for furnishing the CbCR say for
reporting year ending 31 December 2016, has already lapsed. The
CBDT is requested to provide necessary clarification (extension of
time limit for such instances) in order to address this anomaly at
the earliest.
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should be
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