Article explains Applicability of Master File, Master File– Forms and Timelines, Applicability of CbCR, CbCR – Forms and Timelines and Important Terms related to Transfer Pricing  (Accounting Year, Constituent Entity, Alternate Reporting Entity & International Group).

Three-tier transfer pricing documentation structure:

1. Local File- This needs to be documented with the Company itself.

2. Master File- Needs to be filed with IT Department.

3. Country by Country Report– Needs to be filed with IT Department.

♠ Applicability of Master File

Particulars Threshold
Consolidated revenue of International Group for the accounting year Exceeds INR 500 Crore
AND
Aggregate value of International transaction Exceeds INR 50 Crore
OR
Aggregate value of International transaction pertaining to intangible property INR 10 Crore

Note:

Turnover to be taken for Master File is the Accounting Year (i.e., for F.Y 2019-20, accounting Year will be 2019-20)

♠ Master File– Forms and Timelines

Form Particulars Timelines
3CEAA

(Part A)

Every constituent entity of an International Group irrespective of threshold applicability, whether entity is resident or not By due date of Furnishing Return of Income,
3CEAA

(Part B)

Single Constituent entity (as designated by the Group) of the International Group in India meeting the prescribed threshold limit mentioned above By due date of Furnishing Return of Income,
3CEAB (Intimation) In case, Multiple constituent entities resident in India.

To be filed by designated entity.

30 days prior to the date of filing of Master File

♠ Applicability of CbCR

Particulars Threshold
Consolidated revenue of International Group INR 5500 Crore

Note:

Turnover to be taken for Master File is the Accounting Year (i.e., for F.Y 2019-20, accounting Year will be 2019-20)

♠ CbCR – Forms and Timelines :

Form Particulars Timelines
3CEAC Intimation of details of Parent Entity/alternate reporting entity which will file the CbCR.

Note: – Only if PE is not resident in India.

At least 2 months before due date of Furnishing Return of Income, i.e For FY 2019-20: 31st January 2021
3CEAD Filing CbCR – Every parent entity or the alternate reporting entity resident in India Within 12 months following the end of reporting accounting year.

For FY 2019-20: 31st March 2021

3CEAE Intimation of Multiple constituent group entities in India Not Specified yet

♠ Important Terms related to Transfer Pricing

i. Accounting Year

“accounting year” means,-

(i) a previous year, in a case where the parent entity or alternate reporting entity is resident in India; or

(ii) an annual accounting period, with respect to which the parent entity of the international group prepares its financial statements under any law for the time being in force or the applicable accounting standards of the country or territory of which such entity is resident, in any other case; 

ii. Constituent Entity

“constituent entity” means,-

(i) any separate entity of an international group that is included in the consolidated financial statement of the said group for financial reporting purposes, or may be so included for the said purpose, if the equity share of any entity of the international group were to be listed on a stock exchange;

(ii) any such entity that is excluded from the consolidated financial statement of the international group solely on the basis of size or materiality; or

(iii) any permanent establishment of any separate business entity of the international group included in clause (i) or clause (ii), if such business unit prepares a separate financial statement for such permanent establishment for financial reporting, regulatory, tax reporting or internal management control purposes;

iii. Alternate Reporting Entity 

“alternate reporting entity” means any constituent entity of the international group that has been designated by such group, in the place of the parent entity, to furnish the report of the nature referred to in sub-section (2) in the country or territory in which the said constituent entity is resident on behalf of such group;

iv. International Group

“international group” means any group that includes,-

(i) two or more enterprises which are resident of different countries or territories; or

(ii) an enterprise, being a resident of one country or territory, which carries on any business through a permanent establishment in other countries or territories;

(Republished With Amendments)

Author Bio

Qualification: CA in Practice
Company: Neeraj Bhagat & Co.
Location: Delhi, New Delhi, IN
Member Since: 08 Jun 2017 | Total Posts: 1

More Under Income Tax

2 Comments

  1. Osajioku Greg. says:

    Dear Gourav, I have tried to reach you but could not get any of your contact. I tried using the LinkedIn platform but this is also not functioning well from my end coupled with then fact that I am not a social Networking guru. my details are as below.

    I will like to discuss some of the TP issues with you if you would be kind and available to reply.

Leave a Comment

Your email address will not be published. Required fields are marked *