(The Gist of PIB) Signing of Bilateral Agreement for Exchange of Country-by-Country (CbC) Reports between India and the USA [APRIL-2019]
(The Gist of PIB) Signing of Bilateral
Agreement for Exchange of Country-by-Country (CbC) Reports between India and the
Signing of Bilateral Agreement for
Exchange of Country-by-Country (CbC) Reports between India and the USA
- India and the US has agreed to sign relevant bilateral agreement for
exchange country-by-country (CbC) reports (local filing) filed by ultimate
parent corporations based in either of the countries. This agreement will
reduce compliance burden on subsidiaries of companies operating out of these
- Income Tax Act requires subsidiaries of multinational companies (MNCs)
to provide details of key financial statements from other jurisdictions from
where they operate.
- This provides IT Department (CBDT in this case) with operational view of
such companies, primarily with regards to revenue and income tax paid.
- The absence of an agreement between India and US till now entailed a
possibility of local filing of CbC reports in India. CbC reports filing
- Its objective is to ensure that all relevant tax authorities have access
to the same information about an MNC’s value chain and resulting tax
- It seeks to assist tax administration in having complete understanding
of MNCs operations structure, by annually providing them with key
information on global allocation of incomes and taxes paid.
- Under this regime, CbC reports gets electronically transmitted between
competent authorities as per signed framework.
- In India, this provision is part of base erosion and profit sharing
(BEPS) action plan and has been incorporated in the IT Act.
Benefits of India-US CbC agreement
- It will enable both the countries to exchange CbC reports filed by
ultimate parent entities of international groups in the respective
- Indian constituent entities of international groups headquartered in the
US, who have already filed CbC reports in US, will not be required to do
local filing of CbC reports of their international groups in India.