SKP Tax Alert
21 December 2018
Indian revenue prescribes timelines for the furnishing of Country-by-Country Reporting (CbCR) in India by Indian subsidiary/constituent entity in notified circumstances

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.
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