Master File & CbCR Draft notification - A bird’s eye view

October 24,2017
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Vaishali Mane (Chartered Accountant, Mumbai)

Nandkumar Raman (Chartered Accountant, Chennai)

CBDT has come out with the draft rules governing the applicability of Country-by-Country Report (CbCR) and the contents and applicability of Master File (MF) to constituent entities in India. It is a real welcome move on the part of CBDT to seek comments/ observations on the contents from the stake holders before finalising the Rules.

CbCR regulations:

The two rules proposed to be inserted are as under:

Rule

Description

Criteria

Evaluation period

Threshold – exceeding Rs.

Time Limit

10DA

Master File

Information and documents (Master File / MF) to be kept, maintained and furnished by a constituent entity / parent entity / alternate reporting entity of an International group as per Section 92D

– Form 3CEBA

(i) Consolidated revenue of the international group

Immediately preceding previous year

500 Crores

31 March 2018

AND

(ii) A. Value of international transactions of the constituent entity

Year under consideration

50 Crores

OR

(ii) B. Value of international transactions involving intangibles of the constituent entity

Year under consideration

10 Crores

Rule

Description

10DB

CbCR

Furnishing of CbC Report by a constituent entity / parent entity / alternate reporting entity of an International group, if the total consolidated group revenue exceeds INR 5,500 Crores

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The draft rules have provided the list of information to be captured in the MF and which is as per the BEPS Action 13 issued by the OECD. The information and the details to be compiled in the master file has to be prepared by the parent entity or the entity that has knowledge on the activities carried on by the entire group, else there is a possibility that a critical information is not presented, leading to submission of insufficient information or filing of incorrect information, which would result in the levy of penalty.

Contents of Master File:

The information to be captured in the MF as provided in the draft notification (Rule 10DA(1)) are broadly classified into the following four categories:

(i) Description of the business, (ii) Particulars of intangibles, (iii) Particulars of financing activities, (iv) General information

CbCR & Master file – forms & due dates:

In addition to the above, the draft notification has prescribed the forms for filing MF and CbCR for FY2016 – 17 as well as the due dates, which are as under:

Rule

Information to be filed

Forms & due date – FY 2016 - 17

Remarks

10DA(2)

MF

Master file to be filed by a constituent entity of an international group, satisfying the laid down criteria

3CEBA

31 Mar 2018

Part A – to be filed by all the constituent entities

Part B – to be filed by entities satisfying the laid down criteria

10DA(5)

MF

Intimation to the authorities concerned in respect of the constituent entity that would be filing the MF, where there are more than 1 constituent entity in India

3CEBE

01 Mar 2018

The due date as specified under section 139(1).

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