Clarification on CbCR Filing in Certain Cases

Under normal circumstances , the due date for filing of Country by Country Report (CbCR) in India is the due date for filing tax return i.e. 30 November of the next financial year. However, there was lack of clarity on timelines for filing CbCR in cases where India does not have an agreement for exchange of information or there has been a systemic failure . Recently, the Government issued a notification stipulating following timelines in such cases –

Cases Timeline for Reporting
1. The countries with which India does not have an agreement for exchange of information on CbCR.

Twelve months from the end of the reporting accounting year.

For Example; For FY 2018-19, the CbCR must be filed till 31st March,2020.
2. There has been a systemic failure and such failure is intimated to the Indian constituent entity.

The period for submission of the report shall be six months from the end of the month in which said systemic failure has been intimated.

For Example; the date of intimation of systemic failure is 30th March, 2019, the CbCR must be filed till 30th September, 2019.

US is one of the countries that does not have an agreement for exchange of information with India. Saudi Arabia, United Arab Emirates, Sri Lanka, Taiwan are few other such countries. The above notification provides clarity on the timeline for filing of CbCR in India, in above cases. The recent clarification is in line with Government's commitment to systematically adopt and fine tune supporting legislation to implement BEPS recommendations.

  1. As per Sec 286(2) of the Income Tax Act,1961
  2. Sub-section (4) of Section 286 specifies situations in which the said report shall be furnished in India by the constituent entity of an international group, resident in India, namely, those in which there is failure to obtain CbC Report on account of the parent entity being resident of a country or territory with which India does not have an agreement providing for exchange of CbC reports or where there has been a systemic failure of the country or territory and the same has been intimated to such constituent entity.
  3. https://www.incometaxindia.gov.in/communications/circular/circular_9_2018.pdf

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