The Central Board of Direct Taxes released draft rules and forms for use by taxpayers in complying with the country-by-country (CbC) reporting and Master file reporting rules. Comments concerning these draft proposals and forms are due by 16 October 2017.
Draft rule 10DB concerns the filing of the CbC report in India. The CbC reporting requirements were included in a provision of the Finance Act 2016, and thus were made part of the Income-tax Act, 1961. As proposed, the draft CbC rules generally follow the recommendations under the OECD’s base erosion and profit shifting (BEPS) Action 13. Among the requirements for filing CbC reports under the draft rules in India are the following measures.
The proposal also includes guidelines for maintenance of a Master file, if certain requirements are satisfied. These are outlined in the following table.
|Requirements||Threshold||Timeline for filing
revenue of the “international group” in the immediately preceding accounting
(U.S. $76 million)
To be filed on or
To be filed on or before the due-date for filing of return of income.
a. During the
b. In respect of purchase, sale, transfer, lease or use of intangible
The draft rules require that both conditions be satisfied for the detailed Master file information requirements to be triggered.
The draft rules require filing the Master file on Form 3CEBA. This form consists of two parts.
Form 3CEBE would be filed when the international group has more than one constituent entity in India. In such instances, the international group would designate a constituent entity that would be responsible for filing Form 3CEBA (that would be completed by either by the international group or the designated constituent entity).
Accordingly, if there is only one constituent entity in India, Form 3CEBE would not be required to be filed. In such instances, only Form 3CEBA would be filed. Also, if there is more than one constituent entity in India, only the designated constituent entity would file Form 3CEBA, provided that Form 3CEBE is filed either by the international group or the designated constituent entity by the prescribed due date.
Notification and or filing of Form 3CEBE would have to be filed at least 30 days prior to the date of filing the Master file. Hence, for FY 2016-17, the due date would be 1 March 2018.
Read an October 2017 report [PDF 466 KB] prepared by the KPMG member firm in India
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.