Article 1 - Definitions - USA [Exchange of Information]

MINISTRY OF FINANCE (Department of Revenue) NOTIFICATION NO. 37/2019 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. [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: ARTICLE 1 Definitions 1. 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. 2. The terms United States , India , Competent Authority , and Contracting State have the meaning they have in the Convention. 3. 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 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.