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Country by country report local filing deadline extended to March 31, 2019

Glad to share a recent circular wherein the Indian Government has extended the deadline for local filing of Country by country report (CbCR) to 31 March 2019.

Further to a CBDT notification (88/2018) released on 18th December 2018, the timeline for filing the Country by Country Report in Form No. 3CEAD by a constituent entity resident in India, if the parent entity is resident of a country or territory was prescribed in the following scenarios:

  1. Where the parent entity is not obligated to file the above report;
  2. With which India does not have an agreement providing for exchange of the above report; or
  3. There has been a systemic failure of the country or territory and the said failure has been intimated by the prescribed authority to such constituent entity.

The deadlines prescribed were December 2017 for FY  2016-17 and December 2018 for FY 2017-18 for the Indian Tax payer. The notification also prescribed per day penalties in case of non-compliance.  Given that India currently is in the process of finalising the agreement for exchange of CbCR with the United States, the notification had far reaching implications on US MNCs as the 12 month’ time limit from the accounting year of such companies triggered instantly with the requirement to comply with the local filing requirement in India. Further, since the notification had amended the Country by Country reporting due dates retrospectively from 01 April 2016, it could have resulted into an unintended implication of non-compliance for the  financial years [viz. relevant reporting accounting years of the international group] which have already passed.

NASSCOM raised the matter with concerned officials emphasising that the deadline for local filing may be reviewed and extended on an urgent basis and we are glad that our recommendations are accepted.

The circular is accessible at https://www.incometaxindia.gov.in/news/circular_9_2018.pdf

NASSCOM submission is accessible here : https://community.nasscom.in/communities/policy-advocacy/nasscom-submission-on-concerns-emerging-from-cbcr-notification-88-2018.html

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