India Transfer Pricing – Amendment to Master File and Country by Country reporting
The Indian Government through Finance Act, 2016 introduced provisions for Master File (“MF”) and Country-by-Country reporting (“CbCR”). Since then, there are significant amendments made by Central Board of Direct Taxes (“CBDT”) with regards to applicability, due dates and filing requirements of MF and CbCR. Recently, CBDT has amended Rule 10DA in relation to the MF and Rule 10DB of the Income Tax Rules, 1962 (“the Rules”) with regards to CbCR compliances in India vide Notification No. 03/2020/F No. 370142/19/2019-TPL dated 06 January 2020. The amendment is effective from 01 April 2020, accordingly, the same will be applicable from AY 2020-21. Though the amendments are more on simplification of language used in the provisions, still, there are room for interpretation in few cases which require CBDT’s attention.
In the above amendment, the CBDT has attempted to clarify provision laid down in the Income tax Rules (“the Rules”) with regards to the authority with which the Forms relating to MF and CbCR need to be furnished. Accordingly, as per the new amendment, all the Forms related to MF and CbCR needs to be submitted to the Joint Commissioner of Income tax (“Joint Commissioner”) as may be designated by the Director General of Income-tax (Risk Assessment) (“DGIT”). Further, the CBDT has tried to simplify the language used in the provisions laid down in the Rules with regards to applicability and procedural aspects of MF and CBCR.
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