Question: Recently India has signed an Inter-Governmental Agreement for Exchange of Country-By-Country (CbC) Reports with which country?
(a) United States of America
(b) United Kingdom
- India and United States of America have signed an Inter-Governmental Agreement for Exchange of Country-By-Country (CbC) Reports on 27th April, 2019.
- The Agreement was signed by P.C.Mody, Chairman, Central Board of Direct Taxes and Kenneth I. Juster, Ambassador of the United States of America to India on behalf of the two countries.
- India has already signed the Multilateral Competent Authority Agreement (MCAA) for Exchange of CbC Reports, which has enabled exchange of CbC Reports with 62 jurisdictions.
- This Agreement for Exchange of CbC Reports, along with the Bilateral Competent Authority Arrangement between the two Competent Authorities, will enable both the countries to automatically exchange CbC Reports filed by the ultimate parent entities of Multinational Enterprises MNEs in the respective jurisdictions, pertaining to the years commencing on or after 1st January, 2016.
- It would also obviate the need for Indian Subsidiary Companies of US MNEs to do local filing of the CbC Reports.
- A CbC Report has aggregated country-by-country information relating to the global allocation of income, the taxes paid, and certain other indicators of an MNE group.
- MNE groups having global consolidated revenue of 750 Million Euros or more (or a local currency equivalent) in a year are required to file CbC Reports in their parent entity’s jurisdiction. This information will enable an enhanced level of assessment of tax risk by both tax administrations.