Country by Country Reporting - Income Tax India

Analysis of Section 286 of the Income Tax Act, 1961 read with rule 10DB of the Income Tax Rules.

Country by Country reporting ('CbyC') - India Provisions

Some Definitions;
Parent Entity:
As per the Section 286, Parent entity is said to be the Constituent Entity of an International group who holds interest (directly or indirectly) in one or more of the other constituent entities in a way that;
It prepares the Consolidated financial statements under any law/accounting standards of the country in which it is resident; or it is required to prepare the CFS since any of the equity share of any enterprises is listed on a stock exchange;
and no other constituent entity is required to prepare the CFS.

Constituent Entity - (Group entity)


Alternate Reporting Entity;
An entity in place of the parent entity which is appointed to furnish the CbC Report [u/s. 286(2)]

This section will apply only if the consolidated group revenue as per the consolidated financial statements for the accounting year preceeding the group accounting year, does not exceed 5500 crore rupees. Where the currency is different from INR, use telegraphic transfer buying rate of such currency on the last day of the accounting year preceding the accounting year.

Situation 1 - Parent entity is in India/ Alternate Reporting Entity (ARE) is in India

The Parent entity or the ARE shall for every reporting accounting year shall furnish a report (Form 3CEAD) to the Director General of Income-Tax (Risk Assessment) ("DGIT")within 12 months from end of the group reporting accounting year.

Situation 2 - Parent Entity is not in India

The group entity in India shall intimate the DGIT, in form No. 3CEAC
1. Whether it is an Alternate Reporting Entity (ARE); or
2. Details of the parent entity/ARE of such group and the country/ territory of which such entity are resident,
atleast 2 months prior to the due date of furnishishing CbC report.


Situation 3 - Where Parent entity is resident of country where it is not obligated to file the CbC report or India does not have an agreement for exchange of report or there has been a systematic failure and such failure has been intimated by the prescribed authority to the constituent entity, the constituent entity resident in India shall furnish the CbC report as per the due dates mentioned in situation 1. In case of systematic failure, the CbC Report shall be submitted within 6 months fromthe end of the month in which the systematic failure has been intimated.

Where there are more than 1 constituent entity resident in India, the report shall be furnished by any one of the constituent entity, if such group has designated such entity and information is conveyed in writing on behalf of the group to the prescribed authority in form no. 3CEAE.

Where the ARE (resident in country outside India) of such group, has furnished the CbC report in their respective jurisdiction as per the laws of such country and that such country has an agreement with India to exchange the report and the prescribed authority has not communicated any systematic failure of such country to the constituent entity in India and such ARE has intimated such country that it is the ARE on behalf of the group and the Indian constituent entity has intimated the prescribed authority as per situation 1.


The prescribed authority in order to determine the accuracy of the report furnished, may issue a notice requiring the entity to produce information/documents within 30 days of receipt of the notice. (Extension on application made by the entity, may not exceed further period of 30 days (i.e. total 60 days from issue of notice)

The Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems), as the case may be, shall specify the procedure for electronic filing of Form No. 3CEAC, Form No. 3CEAD and Form No. 3CEAE and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the information furnished under this rule.



Conclusion from Above:
1. If parent entity is resident in India, the Country by Country Reporting should be filed either by the Parent Entity or the ARE in India.
2. If the parent entity is not resident in India, the CbC should be filed by the ARE in India, or the constituent entity shall notify the parent entity and the ARE and their country where they are resident for taxation purpose.


Considering the above, if the CbC report in Form 3CEAD is to be filed by any of the Parent Entity or the ARE (who are resident in India), the same should be filed in Form 3CEAD within 12 months from the end of the reporting accountable year. In this case where CbC is filed in India, all the other constituent entities of the international group resident in India other than the ARE shall intimate such ARE in form no. 3CEAE to the DGIT(RA).

Apart from above.
1. Where the Parent entity resident in such a country where it is not obligated to file report similar to CbC report, or
2. India does not have any agreement to provide exchange of the report with such country where the Parent entity is resident, or
3. Where there has been a systematic failure of the country or the territory, provided such failure has been communicated to the constituent entity by the prescribed authority.,

The constituent entity resident in India shall file the CbC report in respect of the international group, If the CbC reporting is not made otherwise.