India Publishes Notification On CbC Exchange Agreement With The U.S.

; posted on
April 30th, 2019

India published Notification No. 37/2019 from the Department of Revenue in an extraordinary version of the Official Gazette.

India and US Filling

The US is one of the notable countries that have not entered in an agreement for the exchange of information with India.

Saudi Arabia, United Arab Emirates, Sri Lanka, and Taiwan are a few other prominent names. The absence of the automatic exchange of CbC report agreement meant that, among others, that US-based companies would be required to file the CbC report in India.

The government of India issued Notification No. 88/2018 on 18 December 2018, which required the India constituent entity of these MNEs to locally file the CbC report in India within 12 months from the end of the reporting accounting year. The government further allowed an extension to March 31, 2019, for cases which were otherwise already overdue for filing or which were due for filing by February 28, 2019.

The India Income tax Act prescribes penalties in case of non-compliance with country-by-country reporting rules. Additionally, MNEs had concerns regarding the confidentiality of the information to be filed, as well as the additional compliance to be undertaken in India.

The Notification

The Notification includes that the Inter-Governmental Agreement for Exchange of Country-by-Country Reports signed between India and the U.S. on 27 March 2019 will be given effect in India in accordance with the entry into force provisions of the agreement.

Earlier in April, India provided an extended CbC report deadline of 30 April 2019 for constituent entities in India of U.S. MNEs due to the fact that although an exchange agreement was signed, it was not yet effective. With Notification No. 37/2019, it is assumed that the Indian authorities will not seek local filing of CbC reports by constituent entities of U.S. MNEs.

Source: Indian Government

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