CBDT eases revenue threshold for MNEs for country-by-county report


The Central Board of Direct Taxes has increased the consolidated group revenue threshold to determine reporting eligibility for multinational enterprises (MNE) groups for applicability of country by country report to Rs 6,400 crore from earlier limit of Rs 5,500 crore.

The Board also clarified that once an entity has been designated to file a Master File on behalf of an international group, such designation would be for Indian and foreign entities as well.

The two changes have been introduced as amendments to sections 10DA and 10DB of the income-tax rules and Form 3CEAB to remove words ‘resident in India’, in a notification issued Tuesday. They come into effect from April 1, 2021.


The changes will provide relief to multinationals that follow the rules for reporting of specified transactions of constituent entities. The changes are also in line with the OECD‘s Base erosion and profit shifting or BEPS Action Plan 13 threshold of € 750 mn, said experts.

“This provides some relief to the MNE groups which does not qualify for CbCR compliance at group HQ level, however, had to comply with the CbCR requirement in India due to earlier lower threshold for such compliances,” said Nitin Narang, Partner- Transfer Pricing, Nangia & Co LLP

In transfer pricing norms, country by country report or CBCR refers to an obligation for MNEs of filing an annual report containing high-level data on the global allocation of the MNE’s income and taxes, and certain other measures of economic activity.

In 2015, as part of the BEPS Action 13, the OECD had proposed a three-tier approach to transfer pricing documentation which required MNEs to prepare a master file containing information relevant for all group members, a local file referring to specific transactions of the local taxpayer and a CBC report.

The CBC report provides tax administrations with information necessary to conduct a high-level, informed risk assessment, for determining which entities to audit further. The risk assessment focuses on transfer pricing concerns, but can be used to assess any BEPS-related risks.

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