CA Final · Direct Tax Laws & International Taxation · Fundamentals of BEPS
Banyan Global, a multinational group, has a parent in Country X, and an Indian subsidiary, Banyan India Pvt Ltd. The group's ultimate parent entity's consolidated group revenue in the preceding year was EUR 800 million. Banyan India wants to know whether it must file a Country-by-Country report under the OECD BEPS Action 13 standard. Which statement is correct about the OECD's recommended threshold and filing obligation?
Since group consolidated revenue of EUR 800 million is at least the EUR 750 million threshold, a CbC report is required. It is ordinarily filed by the ultimate parent entity in its jurisdiction of residence and shared with other countries. The test uses group revenue, not the subsidiary's revenue.
- ACbC report is required from every group with revenue above EUR 100 million, filed by each constituent entity separately in every country
- BCbC report is required where consolidated group revenue in the preceding year is at least EUR 750 million, and is ordinarily filed by the ultimate parent entity in its jurisdiction of residenceCorrect
- CCbC report is required only for groups below EUR 750 million to prevent small group abuse
- DCbC report is required only if the Indian subsidiary's revenue exceeds EUR 750 million
Explanation
The OECD Action 13 standard applies CbC reporting to MNE groups with annual consolidated group revenue of at least EUR 750 million in the preceding fiscal year. The ultimate parent entity files in its residence jurisdiction, and the information is exchanged. With EUR 800 million, Banyan exceeds the threshold. The option based on subsidiary-level revenue is wrong because the test is applied on consolidated group revenue.
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