On 14 March 2018, the lower house of parliament (Lok Sabha) has approved the Finance Bill 2018 with modifications. One of the main changes includes by the bill is changes to the country-by-country (CbC) reporting and Master file requirements.
The budget for 2018, proposed that an Indian “constituent entity” would be required to file CbC reports (if certain conditions were satisfied including that there is no agreement for the exchange of information between India and the country or jurisdiction where the parent company is located). The due date for filing the CbC report would be 12 months from the end of the reporting accounting year.
However, the Finance Bill, 2018 as passed by the Lok Sabha now provides that the Indian constituent entity would be required to file the CbC report within the prescribed period. The implication of this change is that for jurisdictions (of the parent company) with which India does not currently have an agreement for the exchange of information or jurisdictions where there is no obligation to file a CbC report, the Indian constituent entity would now have an extension of time with regard to filing the CbC report domestically.
Another change in the version of the Lower House Finance Law 2018 concerns the definition of the term “agreement” for the exchange of information in relation to CbC reports. This term has been modified to refer only to arrangements for the exchange of CbC reports filed by the Indian parent company or the Indian alternative reporting entity.
