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MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 25th April, 2019
(INCOME TAX)
S.O.1653(E).—Whereas an Inter-Governmental Agreement for Exchange of Country-by-Country Reports was
entered into by the Government of the Republic of India and the Government of the United States of America, which was
signed at New Delhi on 27th day of March, 2019 (hereinafter referred to as the said Agreement and enclosed herewith as
Annexure);
And whereas, the said Agreement shall enter into force on the date on which the second of the two Parties has
provided a written notification to the Government of the other jurisdiction in accordance with paragraph (1) of Article 5
of the said Agreement;
Now, therefore, in exercise of the powers conferred by item (ii) of clause (b) of sub-section (9) of section 286 of
the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies the said Agreement, as set out in the
Annexure hereto, and all the provision of the said Agreement shall be given effect to in the Union of India in accordance
with paragraph (1) of Article 5 of the said Agreement.
[Notification No. 37/2019/F.No. 500/15/2015-APA-I]
RASMI RANJAN DAS, Jt. Secy. (FT&TR-I)
ANNEXURE
AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE
GOVERNMENT OF THE UNITED STATES OF AMERICA ON THE EXCHANGE OF
COUNTRY-BY-COUNTRY REPORTS
Whereas the Government of the Republic of India and the Government of the United States of America (each, a “Party,”
and together, the “Parties”) desire to conclude an agreement to increase international tax transparency and improve
access of their respective tax authorities to information regarding the global allocation of income, taxes paid, and certain
indicators of the location of economic activity among tax jurisdictions in which multinational enterprise groups (“MNE
Groups”) operate through the automatic exchange of annual country-by-country reports (“CbC Reports”), with a view to
assessing high-level transfer pricing risks and other base erosion and profit shifting related risks, as well as for economic
and statistical analysis, where appropriate;
Whereas the CbC Report is one element of a standardized approach to transfer pricing documentation which is
intended to provide tax administrations with relevant and reliable information to perform an efficient and robust transfer
pricing risk assessment analysis;
Whereas the laws of the Republic of India and the United States of America require the reporting entity of an
MNE Group to annually file a CbC Report;
Whereas Article 28 (Exchange of Information and Administrative Assistance) of the Convention between the
Government of the Republic of India and the Government of the United States of America for the Avoidance of Double
Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, together with a related protocol (the
“Convention”), signed at New Delhi on 12th September 1989 authorizes the exchange of information for tax purposes,
including the automatic exchange of information;
Now, therefore, the Parties have agreed as follows:
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THE GAZETTE OF INDIA : EXTRAORDINARY
[PART II—SEC. 3(ii)]
ARTICLE 1
Definitions
- For the purposes of this Agreement and the Arrangement described in paragraph 2 to Article 2 of this
Agreement, the following terms shall have the meanings set forth below:
- (a) the term “Group” means a collection of enterprises related through ownership or control such that it is either
required to prepare consolidated financial statements for financial reporting purposes under applicable
accounting principles or would be so required if equity interests in any of the enterprises were traded on a public
securities exchange;
- (b) the term “multinational enterprise group” or “MNE Group” means any Group that (i) includes two or more
enterprises the tax residences of which are in different jurisdictions, or includes an enterprise that is resident for
tax purposes in one jurisdiction and is subject to tax with respect to the business carried out through a permanent
establishment in another jurisdiction, and (ii) is not an Excluded MNE Group;
- (c) the term “Excluded MNE Group” means a Group that is not required to file a CbC Report on the basis that the
annual consolidated group revenue of the Group during the fiscal year immediately preceding the reporting
fiscal year, as reflected in its consolidated financial statements for such preceding fiscal year, is below the
threshold that is defined in domestic law by the jurisdiction of tax residence of the Reporting Entity and is
consistent with the 2015 Report (for purposes of the foregoing, the threshold includes any modifications that
may result from the 2020 review contemplated in the 2015 Report);
- (d) the term “Constituent Entity” means:
- (i) with respect to an MNE Group having a Reporting Entity resident for tax purposes in the United
States, any “Constituent Entity” as defined in the relevant U.S. Treasury regulations; and
- (ii) with respect to an MNE Group having a Reporting Entity resident for tax purposes in India, any
“constituent entity” as defined in the relevant section of the Income-tax Act, 1961;
- (e) the term “Reporting Entity” means the Constituent Entity that, by virtue of domestic law in its jurisdiction of tax
residence, files the CbC Report in its capacity to do so on behalf of the MNE Group;
- (f) the term “CbC Report” means the Country-by-Country Report to be filed annually by the Reporting Entity in
accordance with the laws of its jurisdiction of tax residence and with the information required to be reported
under such laws covering the items and reflecting the format set out in the 2015 Report (for purposes of the
foregoing, the information and format includes any modifications that result from the 2020 review contemplated
in the 2015 Report);
- (g) the term “Fiscal Year” means:
- (i) with respect to an MNE Group having a Reporting Entity resident for tax purposes in the United States,
the “Reporting Period” as defined in the relevant U.S. Treasury regulations; and
- (ii) with respect to an MNE Group having a Reporting Entity resident for tax purposes in India, the
“reporting accounting year” as defined in the relevant section of the Income-tax Act, 1961; and
- (h) the term “2015 Report” means the final consolidated report, entitled Transfer Pricing Documentation and
Country-by-Country Reporting, on Action 13 of the OECD/ G20 Action Plan on Base Erosion and Profit
Shifting.
- The terms “United States”, “India”, “Competent Authority”, and “Contracting State” have the meaning they
have in the Convention.
- As regards the application of this Agreement at any time by a Party, any term not otherwise defined in this
Agreement shall, unless the context otherwise requires or the Competent Authorities agree to a common meaning (as
permitted by domestic law), have the meaning that it has at that time under the laws of the Party applying this
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Agreement, any meaning under the applicable tax laws of that Party prevailing over a meaning given to the term under
other laws of that Party.
ARTICLE 2
Exchange of Information with Respect to MNE Groups
- Pursuant to the provisions of Article 28 of the Convention, the Competent Authority of each Party shall
exchange with the Competent Authority of the other Party annually, on an automatic basis, the CbC Report received from
each Reporting Entity that is resident for tax purposes in its jurisdiction, provided that, on the basis of the information
provided in the CbC Report, one or more Constituent Entities of the MNE Group of the Reporting Entity are resident for
tax purposes in the jurisdiction of the other Competent Authority, or are subject to tax with respect to the business carried
out through a permanent establishment situated in the jurisdiction of the other Competent Authority.
- The Competent Authorities shall sign an arrangement under the mutual agreement procedure provided for in
Article 27 of the Convention (the “Arrangement”), which shall:
- (a) establish the procedure for the time and manner of the exchange of the CbC Reports described in paragraph 1 of
Article 2 of this Agreement;
- (b) set forth the procedure for collaboration on transmission and errors in the exchange of the CbC Reports
described in paragraph 1 of Article 2 of this Agreement;
- (c) provide for confidentiality, data safeguards, and appropriate use with respect to the CbC Reports described in
paragraph 1 of Article 2 of this Agreement;
- (d) provide for consultations with respect to the CbC Reports described in paragraph 1 of Article 2 of this
Agreement; and
- (e) provide for modifications to, and term of, the Arrangement.
The Arrangement shall be consistent with this Agreement and the Convention.
ARTICLE 3
Confidentiality and Limitation of Use
All information exchanged shall be subject to the confidentiality and other protections provided for in the
Convention, including the provisions limiting the use of the information exchanged. In the event of termination of this
Agreement, all information previously exchanged under this Agreement shall remain subject to such terms of the
Convention.
ARTICLE 4
Consultations and Amendments
- In case any difficulties in the implementation of this Agreement arise, either Party may request consultations to
develop appropriate measures to ensure the fulfillment of this Agreement.
- This Agreement may be amended by written mutual agreement of the Parties. Unless otherwise agreed upon,
such an amendment shall enter into force through the same procedures as set forth in paragraph 1 of Article 5 of this
Agreement.
ARTICLE 5
Term of the Agreement
- This Agreement shall enter into force on the date on which the second of the two Parties has provided a written
notification to the Government of the other jurisdiction that the necessary internal procedures for entry into force of this
Agreement have been completed. However, exchange of information under this Agreement shall not commence until the
Arrangement is operative by its terms.
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THE GAZETTE OF INDIA : EXTRAORDINARY
[PART II—SEC. 3(ii)]
2. This Agreement shall terminate on the earlier of (1) the date of termination of the Convention or (2) the first day
of the month following the expiration of a period of 12 months after the date upon which either Party provides notice of
termination in writing to the other Party.
In witness whereof, the undersigned, being duly authorized by their respective Governments, have signed this
Agreement.
Done at New Delhi, in duplicate, this 27th day of March, 2019, in the English and Hindi languages, both texts being
equally authentic. In case of divergence between the two texts, the English text shall prevail.
FOR THE GOVERNMENT OF THE
REPUBLIC OF INDIA:
P.C. Mody
Chairman, Central Board of
Direct Taxes
FOR THE GOVERNMENT OF THE
UNITED STATES OF AMERICA:
Kenneth I. Juster
Ambassador of the United
States to India
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.
