Questions? 

A constituent entity means

• Any separate entity of an international group that is included in the consolidated financial statement of the said group for financial reporting purposes on a line by line basis (i.e., profits, revenue and assets)
• Any such entity that is excluded from the consolidated financial statement of the international group solely on the basis of size or materiality
• Any PE of any separate business entity of the international group included in above points, if such business unit prepares a separate financial statement for such PE for financial reporting, regulatory, tax reporting or internal management control purposes

Was this helpful?

An inbound CE is required to file CbCR in India if:

• Its parent entity is not obligated to file a CbCR for a reportable accounting year
• If there is no exchange agreement of CbCR with ultimate or alternate reporting entity’s jurisdiction
• If there has been a systemic failure in a country and this is intimated

Was this helpful?

As per the section 286(4) of the Income Tax Act, if the ultimate parent entity, resides in a country where CbCR is not required to be filed and the group has not opted for a surrogate filing, then the entity will be obligated to file a CbCR in India.

Was this helpful?

Every constituent entity is required to file Part A of the Form 3CEAA and Part B is to be filed by entitles that fall in the mentioned criteria. However, in case there are more than two CEs resident in India of an international group, any one CE resident in India can be designated to file Form 3CEAA (both Part A and B) on behalf of other CEs operating in India (including non-resident CEs operating in India) by way of an intimation in Form 3CEAB.

For instance, an international group has one Indian resident CE and five non-resident CEs with taxable income in India. Since, there are not more than one resident CEs in India of the group, all the entities (i.e., one resident CE and five non-resident CEs) will be required to file MF in India.

Was this helpful?

Yes, OECD (Organisation for Economic Co-operation and Development) BEPS (Base Erosion and Profit Shifting) Action Plan 13 has been implemented in India through Section 92D and Section 286 of the Act, accompanied by relevant rules (i.e., Rule 10DA and 10DB).

Was this helpful?

It is recommended in the BEPS report that the countries should adopt a standardized approach to transfer pricing documentation. A three-tiered structure has been mandated consisting of:-

1. Master file
2. A local file
3. A country-by-country report (CbC Report)

Was this helpful?

Alternate Reporting Entity means any constituent entity of the international group that has been designated by such group, in the place of the parent entity, to furnish the report of the nature referred to in Section 286(2) of the Act in the country or territory in which the said constituent entity is resident on behalf of such group.

Was this helpful?

According to Rule 10DB(5), when there are more than one constituent entity resident in India, any one CE, resident in India, can be designated to file CbCR by way of filing an intimation form in Form 3CEAE before the due date of filing CbCR.

Was this helpful?

Following caution can be taken while filling-up the tax payment challan:

Clearly mention the following:

• Type of payment
• Assessment year
• Permanent Account Number
• mode of payment of the tax
• the head of payment

Was this helpful?

The rates of Income-tax and corporate taxes are decided by the Finance Act passed by the Parliament every year. There is a free online tax calculator present at www.incometaxindia.gov.in where once can check his/her tax liability.

For more information, click here.

Was this helpful?