CbCR: Country-by-Country Reporting Defined and Explained
CbCR defined: the per-jurisdiction report of revenues, profit, tax paid, employees and assets for a group, triggered at consolidated revenue of ₹1,000 cr in India.
Definition
CbCR (Country-by-Country Reporting) is the group-level report, required of large multinational groups under BEPS Action 13, that breaks the group’s activity down by jurisdiction: revenues, profit before tax, income tax paid and payable, number of employees, and tangible assets other than cash, for each jurisdiction in which the group operates.
In India it is prescribed by Rule 10DB of the Income-tax Rules, and the obligation attaches to groups with consolidated revenue of ₹1,000 crore or more. The report is filed by the ultimate parent entity in its jurisdiction (or by a competent group member where the UPE’s jurisdiction does not require it), and it is exchanged between tax authorities under the relevant treaties and competent-authority arrangements.
Why it matters
The CbCR is not a pricing document — it does not set or test any transfer price. It is the scrutiny map: the per-jurisdiction picture of where the group’s activity, profit and tax sit, which is exactly the picture a transfer pricing examination starts from. A CbCR whose jurisdictional pattern does not match the group’s functional analysis is the document that gets the entity’s Local File opened.
Example
A group with ₹1,800 cr consolidated revenue operates in five jurisdictions. Its CbCR shows 62% of profit and 21% of employees in a jurisdiction that performs 18% of the group’s revenue-generating functions — a pattern that invites the question the Master File and the affected entity’s Local File must answer.
See also
- Master File — the group-level companion
- Local File — the entity-level defence
- The documentation pillar guide
FAQ
Is the CbCR filed in India or in the parent’s country? Where the ultimate parent is resident in India, with the parent’s return; where the UPE is elsewhere, in the UPE’s jurisdiction, with exchange to India as the treaty/CAA network provides. Indian entities in scope groups receive the report through the exchange, and must be able to make sense of their own jurisdiction’s line.
Does a wrong CbCR line cause a transfer pricing adjustment by itself? Not by itself — the CbCR does not determine pricing. Its failure mode is indirect: the mismatch draws the examination, and the examination then applies the arm’s length principle to the entity’s own transactions.
Run the screens as a study, not a spreadsheet
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