Q: For companies that significantly rely on their intangibles/ trade secrets or supply chain strategy for an edge over competitors (such as in the case of Pharma Cos), certain disclosures required by the CbCR/Master File could reveal insights into these aspects and might pose a business risk. How should such a company approach the sharing of information relating to intellectual property (IP) it would otherwise deem confidential?


Kunj Vaidya (Partner and Leader, Transfer Pricing, PwC India)

The Master file requires details such as overall IP strategy of the Group, location of principal R&D facilities, list of important IPs owned in the group and the entities owning them, description of important transfers of IP within the group during the year etc. Some of these could be considered as sensitive business information. As per the Master file rules, it is mandatory to furnish the information as part of master file. As per the OECD guidelines and the multi-lateral competent authority agreement (MCAA) for exchange of CbCR , tax jurisdictions are expected to have in place necessary measures to ensure confidentiality, data safeguards and limiting the use of information exchanged under CbCR. Nevertheless, certain jurisdictions such as the EU are considering proposals to require public filing of CbCR.

As regards the Master file, as per section 92D of the Income-tax Act, 1962 read with the Rules, it is required to be filed online with the Director General (Risk Assessment) and is subject to the safeguards provided under section 138 of the Act relating to disclosure of information respecting assessees. In light of the mandatory reporting requirements, companies should evaluate genuine business confidentiality concerns, apply their prudence and present information such that it helps the tax authorities to understand the overall functional and risk profile of the group/entities.​

In line with Rule 10D(6) and Rule 10DB(8), Director General (Risk Assessment) shall be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the information furnished.

The above responses to the questions has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication. PricewaterhouseCoopers Private Ltd, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences faced by anyone who have chosen to rely on the information contained in this publication or for any decision based on it. 

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