Who has to file Form 3CEAC in India?
The filing falls on Indian constituent entities of groups that are within country-by-country reporting. It is an intimation rather than a report: it tells India the identity of the group's parent entity and the jurisdiction in which the group report will be filed. That is the whole content, and it is why groups underestimate it, because the substantive figures go somewhere else. The test is whether the Indian company is a constituent entity of a group within the regime, which is a question about the group's structure and size rather than about the Indian company's own results. Establish it from the group's consolidation, not from the Indian entity's view of itself.
Why does India want to know where the group report is filed?
Because India uses the answer to decide how it will get the report. If the group's report will be filed in a jurisdiction India can receive it from through exchange, India does not need a local filing. If it will not, a local filing is what fills the gap. The intimation is therefore an input to that decision rather than a formality. Naming the wrong parent entity or the wrong jurisdiction does not merely misdescribe the group; it can put India on the wrong side of that choice, and the Indian entity is the one holding the consequence. Check both against the group's own reporting arrangements before filing.
Do we still file 3CEAC if the parent files the report abroad?
Yes, and that is the situation the intimation is designed for. It tells India where the group report will be filed and by whom, which is exactly how India decides whether the report will reach it through exchange or whether it needs a filing in India instead. The parent filing abroad is the fact being reported, not a reason to stay silent. Groups that reason from the report being handled at head office to nothing being due in India are the common failure here. Confirm with the group which entity is the parent for these purposes and which jurisdiction it files in, then say so.
Our group has two Indian entities, do both file 3CEAC?
Each Indian constituent entity has to be looked at on its own. This intimation is about identifying the group's parent and reporting jurisdiction, not about allocating one filing between Indian companies the way the master file designation does, so do not carry the master file answer across to it. Work out which of the Indian companies were constituent entities of the group for the period, including any acquired partway through it, and take the filing position for each. Where a group's Indian compliance has been run from one company's calendar, the entities added later are the ones that get missed.
Does a loss-making Indian subsidiary have to file the intimation?
Yes, if it is a constituent entity of a group within country-by-country reporting. The obligation is decided by facts rather than by tax owing, which is why a nil position does not remove it, and the same logic applies to losses. The group's size and structure put the group in the regime; the Indian company's own results are beside the point. This is a common reason the filing is skipped, because it looks like a tax obligation, so a year with nothing to pay looks like a year with nothing to do. Put it on a structural compliance calendar instead of the return cycle.
What happens if the reporting jurisdiction changes mid-year?
Take the position as it actually stood, and say so. The intimation names the group's parent entity and the jurisdiction in which the group report will be filed, so a restructuring that changes either during the period changes the thing being reported. Work from the group's own restructuring papers rather than from its current organisation chart, establish which parent and which jurisdiction applied to the reporting period in question, and file on that basis. Where the group itself has not settled the question, that is the work: the Indian entity cannot file a coherent intimation while head office is still deciding where the report goes.
Can you give a plain transfer pricing example?
A Canadian company manufactures at a cost of one hundred and its US subsidiary sells to customers for one hundred and eighty. If the parent invoices the subsidiary at one hundred and ten, most of the margin is taxed in the United States; invoice at one hundred and seventy and most of it is taxed in Canada. Nothing about the business changed — only which treasury collects. That is why the arm's length price, the one unrelated parties would have agreed, is the reference point both authorities use. See our transfer pricing work.
What are the transfer pricing methods?
Five, in two groups. Three compare transactions: comparable uncontrolled price, resale price, and cost plus. Two compare profits: the transactional net margin method, and profit split. The OECD asks for the most appropriate method on the facts rather than a fixed hierarchy; the United States applies a best-method rule to similar effect. Selection is itself a documented judgment, and a method chosen without recording why is a weak position under audit. See our transfer pricing work.
