On 5 April 2021, the Indian Central Board of Direct Taxes (CBDT) has released a Notification No. 31/2021 which include the changes of CbC reporting threshold and Master file requirement. Accordingly, the threshold for CbC reporting has been increased from INR 55 billion (5,500 crore) to INR 64 billion (6,400 crore) which is consolidated group revenue of MNE in the preceding year.
Changes are also being made to the master file submission requirement (Form 3CEAA), essentially clarifying that if there is more than one constituent entity of an international group required to submit the master file, only one Entity is required for submission if it has been designated for this purpose and this has been conveyed to the authority. For the purposes of the CbC reporting and Master File, the tax authority will be changed from Joint Commissioner, who can be designated by the Director General of Income-tax (Risk Assessment), to the Joint Director, who can be designated by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems).
The changes are deemed to have entered into force on 1 April 2021.
