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India: Arrangement for country-by-country report exchanges with United States is signed

India: Arrangement for CbC report exchanges with U.S.

India’s Central Board of Direct Taxes (CBDT) today issued a release announcing that representatives of the governments of India and the United States have signed an arrangement (a bilateral competent authority arrangement) to allow for the exchange of country-by-country (CbC) reports.

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The CBDT release [PDF 71 KB] states that the CbC report-exchange arrangement will:

…enable both the countries to automatically exchange CbC Reports filed by the ultimate parent entities of Multinational Enterprises (“MNEs”) in the respective jurisdictions, pertaining to the years commencing on or after 1st January, 2016. It would also obviate the need for Indian subsidiary companies of US MNEs to do local filing of the CbC Reports, thereby reducing the compliance burden.

Today’s signing of the CbC report exchange arrangement had been expected. Read TaxNewsFlash

India already has multilateral competent authority agreements (MCAAs) for the exchange of CbC reports with 62 jurisdictions. Today’s signing adds the United States to that list of jurisdictions.

A CbC report provides aggregated CbC information relating to the global allocation of income, the taxes paid, and certain other indicators of an MNE group as well as a list of all the constituent entities of an MNE group operating in a particular jurisdiction and the nature of the main business activity of each constituent entity. MNE groups having global consolidated revenue of €750 million or more (or a local currency equivalent) in a year are required to file CbC reports in their parent entity’s jurisdiction. The equivalent of €750 million in Indian rupes is INR 5500 crore. 

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