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CA Final · Direct Tax Laws & International Taxation · Latest Developments in International Taxation

Case: Tarang Pharma Ltd, an Indian company, is a constituent entity of a multinational group headquartered in India. The group's consolidated revenue in the immediately preceding previous year was well above the threshold for country-by-country reporting (CbCR). Under the Income-tax Act, who is primarily obliged to furnish the CbCR (Form 3CEAD) in India for this group?

The Indian parent entity must file the country-by-country report because the group's ultimate parent is resident in India. The obligation attaches to the parent, not to foreign subsidiaries, auditors or the largest constituent entity, since India is the parent jurisdiction for the group.

  1. AThe Indian parent entity, as the ultimate parent of the international group resident in IndiaCorrect
  2. BEvery foreign subsidiary of the group, directly with the Indian tax authorities
  3. CThe statutory auditor of the Indian company, on behalf of the group
  4. DOnly the constituent entity with the highest turnover in the group, wherever resident

Explanation

Where the ultimate parent entity of an international group is resident in India, it must furnish the CbCR report to the prescribed authority in India. Foreign subsidiaries and auditors are not the primary filers in this case. The Indian parent is the one with the obligation because the parent jurisdiction is India.

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