MF and Cbc Notifications

FILING OF FORM 3CEAB & 3CEAC – 31 OCTOBER 2022

While we prioritise on form 3CEB & TP documentation by 31 Oct 2022, one should not miss on filing two more forms related to transfer pricing whose due date is also 31 October.

1.    Form 3CEAB – Master file designation
In case of more than one constituent entity of an international group (“group”) operating in India, the Master file in Form 3CEAA may be furnished by any one designated entity. One needs to bear in mind that Part A of Masterfile is applicable to all constituent entities of the Group & there is no threshold for applicability.

Therefore this designation notification needs to be filed in Form 3CEAB by a designated entity. Designation is provided to ease the administrative compliance of MNE Groups having multiple entities in India.

Earlier, the rules permitted that designation could happen only for resident entities & therefore excluded foreign entities. However, rules were amended effective 1 April 2021, where the words ‘resident in India’ was omitted. Hence designation can be filed on behalf of all the constituent entities including foreign entities in India. Hence, all the foreign entities of the Group who have income accruing or arising in India & were filing return & Form 3CEB in India, have to file Masterfile & Masterfile designation notification by one entity will take care of these requirements for foreign entities

If this form is not filed within the timeline, each of the constituent entities of the Group would be required to separately file Form 3CEAA by 30 November 2022.

2.    Form 3CEAC – CbCR notification
This intimation is required to be filed by a resident constituent entity of the Group where the parent entity is not an Indian resident & where the consolidated group turnover crosses prescribed threshold for CbC reporting ie 750 mn Euros (INR 6400 crs) in the preceding accounting period. For CbC compliance, the accounting period of the ultimate parent entity is applicable. If year ending is 31Dec 2021, the consolidated turnover of 2020 is reckoned as the threshold.

For Groups where the year ending of the parent is 31 Dec 2021, the due date for filing this form would be 31 October 2022 (10 months from the end of the reporting accounting year).
Further the parent company should be filing the CbCR in its jurisdiction, & India should also have an existing agreement with that country providing for exchange of the CbCR. India is a signatory to the MCAA where most of the countries are also signatories. With US, India has entered into a separate bilateral agreement for exchange of CbCR. In case Indian tax authorities, want to obtain CbCR filed by the parent, they need to invoke MCAA to obtain this information. The Indian tax payer may not be required to share CbCR if called for.

Considering the above forms are relatively simple one should not miss these submissions