When an international group has multiple constituent entities in India, a single entity can be designated to file the Country-by-Country Report on behalf of all. Understanding the designation process is essential for groups with multiple Indian operations.
The Statutory Framework
Section 511(5)
If there are more than one constituent entities of the group resident in India, the report shall be furnished by any one constituent entity if:
- The international group has designated such entity to furnish the report on behalf of all constituent entities resident in India
- The information has been conveyed in writing on behalf of the group to the prescribed authority
Form 60
The information required to be conveyed under Section 511(5) regarding the designated constituent entity shall be furnished in Form No. 60 .
Choosing the Designated Entity
Criteria for Selection
Groups should consider the following factors when selecting the designated entity:
- Size and significance of the Indian operations
- Administrative capability
- Access to group-wide information
- Relationship with tax authorities
- Existing compliance infrastructure
Practical Considerations
- The designated entity should have the capacity to compile group-wide information
- It should have established relationships with tax authorities
- It should be able to meet filing deadlines
Filing Requirements
Notification
The group must convey the designation in Form No. 60 to the Joint Director designated by the Director General of Income-tax (Systems) .
Timing
The information must be conveyed before the due date for furnishing the CbCR.
Responsibility
The designated entity is responsible for:
- Compiling the CbCR
- Ensuring accuracy of the information
- Filing on or before the due date
- Responding to queries from tax authorities
Consequences of Non-Compliance
Failure to Designate
If no entity is designated, all constituent entities may be required to file the CbCR separately, increasing compliance burden.
Failure to File
If the designated entity fails to file the CbCR, all constituent entities may be liable for penalties.
Expert Legal Guidance
Choosing the designated constituent entity is a critical decision for international groups. Anuj Desai & Associates provides expert advisory services on CbCR compliance, helping groups make informed designation decisions.