India-US Bilateral exchange agreement for CbCR – finalized

Ministry of Finance has issued a Press release dated 15 March, 2019 stating that a bilateral agreement has been finalized between India and US for exchange of Country-by-Country Reports (CbCR). The proposed agreement will apply retrospectively for exchange of CbCR from the financial years commencing from 01 January, 2016. The agreement will be signed on/before March 31, 2019.

The press release states that “This would enable both the countries to exchange CbCR filed by the ultimate parent entities of International Groups in the respective jurisdictions, pertaining to the financial years commencing on or after 1st January, 2016”. As a result, Indian constituent entities of international groups headquartered in USA, who have already filed CbCR in the USA, will not be required to do local filing of the CbCR of their international groups in India”   

You would recall that in December 2018, CBDT had prescribed timelines for filing the Country by Country Report in Form No. 3CEAD by a constituent entity resident in India in certain scenarios. The deadlines prescribed were December 2017 for FY  2016-17 and December 2018 for FY 2017-18 for the Indian Tax payer and the notification also prescribed per day penalties in case of non-compliance.  Further to our efforts, the deadline for such compliance got extended to March 2019  thereby giving a breather on an instant compliance.

The current agreement should help in overall CbCR compliance requirements of companies headquartered in the USA.

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