The Indian Central Board of Direct Taxes (CBDT) has notified the final rules (the rules) for maintaining and furnishing of Transfer Pricing (TP) documentation in the Master File (MF) and Country-by-Country Report (CbCR). Following an inclusive approach when introducing a new and important regulation, the CBDT had, in line with global best practices, sought public comments on the draft rules. It is apparent from a reading of the rules that the CBDT has incorporated some of the recommendations/ comments which were put forth by us.
Following entities are required to file the Master File in India (Form No. 3CEAA)
1. the consolidated group revenue for the accounting year exceeds INR 5,000 million (the draft rules had provided that this threshold is to be determined considering the group revenue for the preceding accounting year); and
2. for the accounting year, the aggregate value of international transactions exceeds INR 500 million, or aggregate value of intangible property related international transactions exceeds INR 100 million.
The Master File has to be furnished by the due date of filing the income-tax return i.e. 30 November following the financial year. However, for financial year 2016-17 (“FY 2016-17”), the due date is extended to 31 March 2018.
IGs with multiple constituent entities in India can designate one Indian constituent entity to file the Master File in India, provided an intimation to this effect is made in Form No. 3CEAB, 30 days prior to the due date for filing the Master File in India.
|A constituent entity
-whether the entity has entered into an international transaction
-whether the entity is resident or not)
|Part A Form No. 3CEAA||By due date of furnishing ROI, except for financial year (FY) 2016-17 which is on or before 31 March 2018||Director-General of Income tax, Risk Assessment (DGIT, RA)|
|A constituent entity, having:
a. Consolidated Group revenue of more than INR 5 billion for the accounting year; and
b.Aggregate value of international transaction during the accounting year-
-Exceeds INR 500 million; or
-Exceeds INR 100 million in respect of purchase, sale, transfer, lease or use of intangible property
|Part B of Form No. 3CEAA||By due date of furnishing ROI, except for financial year (FY) 2016-17 which is on or before 31 March 2018||DGIT, RA|
|The designated entity, where there are multiple CEs resident in India||– Form No. 3CEAA (Part A and Part B)
-Form No. 3CEAB
|– Form No. 3CEAA (Part A and Part B)-By due date of furnishing ROI, except for financial year (FY) 2016-17 which is on or before 31 March 2018
-Form No. 3CEAB-atleast 30 days before the due date of filing Form No. 3CEAA except for financial year (FY) 2016-17 which is on or before 1 March 2018