Updated: Mar 15, 2019 16:16 IST
New Delhi [India], Mar 15 (ANI): Indian subsidiaries of US multinational corporations have a cause for cheer with the Central Board of Direct Taxes (CBDT) providing compliance relief for those whose parents are in countries which do not have an agreement with India.
The board has extended the due date for filing of country-by-country (CbC) reports by certain MNCs till March 31. So such Indian subsidiaries now have two more weeks to furnish their reports.
“The CBDT as a one-time measure in exercise of powers conferred under section 119 of the Act has extended the period for furnishing of the CbC report (local filing) in respect of reporting accounting years ending on or before February 28, 2018 up to March 31, 2019,” said an official statement issued on Friday.
The concept of CbC reports, which gets electronically transmitted between competent authorities, was introduced to assist tax administration in having a complete understanding of the way in which MNCs structure their operations, by annually providing them with key information on the global allocation of incomes and taxes paid.
The absence of an agreement between India and the United States till now entailed a possibility of local filing of CbC reports in India.
However, a bilateral competent authority arrangement, along with an underlying inter-governmental agreement, for exchange of CbC reports between India and the United States has now been finalised and will be signed on or before March 31.
“This will enable both the countries to exchange CbC reports filed by the ultimate parent entities of international groups in the respective jurisdictions, pertaining to the financial years commencing on or after January 1, 2016,” said the statement.
As a result, Indian constituent entities of international groups headquartered in the United States, who have already filed CbC reports in the United States, will not be required to do local filing of the CbC reports of their international groups in India, it said.
The objective of mandating CbC is to ensure that all relevant tax authorities have access to the same information about an MNC’s value chain and the resulting tax consequences.