Does my Indian subsidiary have to file Form 3CEAD?
It depends on the parent, not on you. Local filing in India is a fallback: it applies where the group's parent jurisdiction does not exchange the country-by-country report with India. If the report reaches the Indian authority through exchange, the Indian entity is not the one filing it. So the first thing we establish is where the group's parent files, and whether that report travels to India. The Indian subsidiary's own turnover, profit or headcount does not decide the question, which is the part groups usually get wrong.
Our parent filed the CbC report abroad, do we still file in India?
Sometimes. A report filed with the parent's own authority only removes the Indian filing if it reaches India. Where the parent's jurisdiction does not exchange the report with India, the group's Indian entity files locally instead, and the parent's filing abroad does not discharge that. The practical work is documenting the exchange position for the reporting year and keeping the evidence with the file, because the position can differ from one year to the next. We would rather establish it before the due date than argue it afterwards.
How do I know whether my parent's country exchanges CbC reports with India?
It is a question about the arrangements between the two authorities for the reporting year in issue, not about the group. We check the position as it stood for that year, record what we relied on, and keep it with the filing papers. The reason to write it down is that a decision taken once tends to be carried forward by whoever prepares the next year's compliance calendar, while the position underneath it may have moved. Where the arrangement is in place, the Indian entity is not the filer. Where it is not, local filing is what fills the gap.
What is a designated alternate filer, and does that remove our filing?
An alternate filer is an entity nominated to discharge the group's country-by-country obligation in place of the parent. Where such an entity has been designated and its report reaches India, the Indian entity is not the local filer. Where it has not, or where the report does not reach India, local filing remains. Groups often assume a nomination made at head office covers India without checking that the nominated entity's own jurisdiction exchanges with India. That is the check worth making, and it is a short one once you know which entity was actually named.
Does our small turnover in India exempt us from Form 3CEAD?
No. The obligation follows the group and the exchange position, not the size of the Indian entity. A small Indian company inside a large group can be the local filer, and a substantial Indian company inside a group whose parent report reaches India will not be. This is the most common misreading we see: the thresholds people have in mind belong to the group's reporting obligation, not to the Indian entity's role in discharging it. We look at the group first and the Indian entity second.
The group made a loss this year, is Form 3CEAD still due?
Yes, if the local filing position applies. The obligation is decided by facts about the group and the exchange arrangements, not by whether tax is owing. A loss-making year produces a report with loss figures in it; it does not produce an exemption. Groups sometimes stand a filing down on the reasoning that there is nothing to collect, and then find the default sits on the record with nothing to show against it. Where the obligation applies we file it and keep the working papers, whatever the result for the year.
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.
Is "fund transfer pricing" the same thing as transfer pricing?
No — and if you came here to calculate FTP, this is not it. Fund transfer pricing is a bank's internal allocation of funding costs and benefits between its own business units, a treasury and asset-liability management discipline used to measure branch or product profitability. Tax transfer pricing is about prices between legally separate related parties across borders, and about which country taxes the resulting profit. The words overlap; the fields do not. See our transfer pricing work.
