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About Master File and Country by Country Reporting

Prior to the implementation of Master File and CbCR, the absence of qualitative data, particularly with regard to corporate taxation, was a significant obstacle to quantifying the fiscal and economic effects of tax avoidance. Authorities found it extremely challenging to analyse transfer pricing analyses of transactions between linked organisations because of these gaps. In fact, in such a circumstance, the authorities found it even more hard to conduct audits.

Action Plan 13 was developed as a first step to deal with this significant issue. Every multinational corporation is required to submit a comprehensive report, known as a “county by country report” (CbCr), to the relevant tax authorities in accordance with this Action Plan.

A master file should be filed by every constituent entity of an international group to tax authorities of a country in which such an entity is a resident. The MF should include a general overview of the MNE firm, including the nature of its international operations, general TP policies, revenue distribution, and economic activity. MF is not meant to offer comprehensive explanations. It will primarily include information about the group’s organisational structure, the business’s description, intangibles, intercompany financial transactions between group members, and MNEs’ financial and tax positions.

The Indian requirements of MF shall be applicable to every CE of an IG, subject to the following two conditions:

  1. Consolidated group revenue for the IG of which the CE is a part of, as reflected in its consolidated financial statements for the previous accounting year, should exceed INR 500 Cr. (and)
  2. The aggregate value of international transactions of the CE:
    1. During the reporting accounting year, as per books exceeds INR 50 Cr. (or)
    2. Aggregate value of international transactions of the CE in respect of purchase, sale, transfer, lease or use of intangible property, during the reporting accounting year, as per books, exceeds INR 10 Cr.

A penalty of Rs. 500000 is attracted on failure to file the Master File.

The parent entity or alternate reporting entity which is resident in India to submit the following information in CbCr:

The ultimate parent organisation of the group must submit the CbCr, and the tax jurisdiction where it is lodged must share it with other jurisdictions.

Any constituent entity may be designated by the ultimate parent to submit the CbCr to the tax authorities where the alternate reporting entity resides. In this scenario, the alternative reporting entity fills the parent company’s place and submits the CbCr. This substitute reporting entity has been designated as surrogate parent entity by the OECD.


Our expertise in this role provides you with end-to-end administration and data aggregation in accordance with the most recent CbCR rules, allowing you to avoid penalties caused by faulty data submission and failure to meet deadlines.

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