Country-by-Country Reporting (CbCR): Thresholds, Filing, Data Quality

Country-by-Country Reporting (CbCR) is the group-level disclosure of the MNE group’s allocation of income, earnings and tax across jurisdictions: for each jurisdiction, the revenues, the profit before tax, the income tax paid and currently due, the number of employees, and the tangible assets. It is the BEPS Action 13 third pillar — alongside the Master File and the Local File — and it is the document tax authorities exchange with each other automatically. That exchange is what makes the CbCR more than a filing: it is the risk assessment input of every competent authority in the group’s footprint, and the data quality question is the question that decides whether the CbCR opens an examination or closes the file.

The thresholds

Regime	Threshold	Effect
OECD (Action 13)	Consolidated group revenue of €750 million or more (the base-year test, with a two-year grace where the threshold is crossed)	The group is in scope; the ultimate parent (or surrogate) prepares the CbCR
India	Consolidated group revenue of ₹1,000 crore or more	The Indian filing obligation — Forms 3CEB / 3CEBA — applies

The threshold is on the group’s consolidated revenue, and it is the same threshold family as the Master File’s — the group that triggers the CbCR almost always triggers the Master File too, and the two documents share their underlying data (the segment and country breakdowns must reconcile — see the data quality section below).

Note the shared threshold with Pillar Two: the GloBE rules’ scope is the same €750 mn consolidated-revenue test, and the CbCR is the data backbone Pillar Two builds on — see CbCR and Pillar Two.

The filing: who files what, where

The CbCR is prepared once, by the ultimate parent entity (or the surrogate parent where the ultimate parent’s jurisdiction does not require the local filing), and it reaches the other jurisdictions by automatic exchange of information (AEoI) between competent authorities — not by each entity filing in each jurisdiction.

In India, the mechanics are two forms:

Form	Filed by	Content	Timing
Form 3CEB	The ultimate parent entity resident in India, or the surrogate parent entity, or the head office of the MNE group in India — where the CbCR is prepared in India	The full CbCR — the per-jurisdiction report	With the return of income for the year (the due date under section 139(1) — July 31 for non-audit cases, October 31 for audit cases)
Form 3CEBA	The Indian constituent entity of an MNE group whose ultimate parent prepares the CbCR outside India	The constituent entity’s CbCR data (its own jurisdiction’s row, plus the required particulars)	With the constituent entity’s return of income

The design: the group’s CbCR data reaches the Indian authority either directly (3CEB, where India prepares it) or through the constituent entity’s statement (3CEBA, where the parent prepares it abroad and the exchange — or the constituent’s filing — carries it). Where the Indian entity is neither the ultimate parent nor the surrogate, the 3CEBA is its obligation, and the exchange with the parent’s jurisdiction is the authority’s channel for the full report.

The data: the seven items, per jurisdiction

For each jurisdiction in which the group has a constituent entity (or permanent establishment), the CbCR reports:

1. The number of constituent entities (and PEs)
2. The revenues from external independent parties
3. The revenues from related parties
4. The profit (loss) before income tax
5. The income tax paid (on a cash basis)
6. The income tax currently due (on an accrual basis)
7. The number of employees; the tangible assets held, net book value

Items 2 and 3 — the revenue split between external and related-party revenue — are the items the TP examiner reads first: the related-party revenue is the controlled-transaction volume, and its allocation across jurisdictions, against the profit allocation (item 4), is the transfer pricing picture of the group in one table.

Data quality: the quiet scrutiny trigger

The CbCR is not examined like a Local File — it is risk-scored. The authorities’ use of the exchanged data is the flag analysis:

Flag	The computation	The consequence
The effective tax rate gap	Item 5+6 (tax) ÷ item 4 (profit before tax) per jurisdiction, against the jurisdiction’s statutory rate	A jurisdiction with profit and a materially low ETR is the classic “value shifting” flag — the jurisdiction’s authority looks at how the profit got there, which is a TP examination
The related-party intensity	Item 3 (related revenue) as a share of total revenue, by jurisdiction	A jurisdiction that is all related-party revenue and thin profit is the service-centre / financing-entity profile the TP review targets
The inconsistency	The CbCR rows vs the Local Files vs the Master File segment data vs the statutory accounts	The CbCR is cross-checked against the documentation the authority already holds (or requests); a number that does not reconcile across the three tiers is the specific, citable finding that opens the file
The movement	The year-on-year shift of profit and tax across jurisdictions without a corresponding structural change	The trend flag — the same group, the same structure, the profit moving; the examination asks what changed

The data quality discipline follows directly:

• One source, all tiers. The CbCR rows, the Master File segment table and the Local File financials come from the same management accounts, mapped identically. The reconciliation is the named step in the documentation cycle — not an afterthought, because the afterthought is where the unreconciled number lives.
• The tax data is the hard part. Items 5 and 6 (paid vs currently due) require the tax positions in every jurisdiction — the provisions, the assessments, the pending items — and they are the items most often wrong in first-year filings. The currently-due figure is an accrual figure that must match the tax computations, not the payments.
• The related-party revenue is the TP number. Item 3 must equal the controlled-transaction revenue in the Local Files — the CbCR related-party revenue and the Local File’s transaction list are the same population, and the gap between them is the finding that does not need a TPO to find.
• The PEs are in scope. The permanent establishments — not just the constituent entities — carry CbCR data (the PE’s revenue and profit allocated to its jurisdiction), and the PE allocation is its own documentation question.

The examination the CbCR opens

Where the flags fire, the sequence is predictable: the authority requests the Local File (and the Master File) under its production power — in India, the section 282BC notice — and the examination runs on the documentation the CbCR pointed at. The CbCR is thus the front door: it does not adjust anything by itself, but it is where the authority decides which entity, which transaction and which year to open. A CbCR whose data quality is clean — reconciled across the tiers, the tax positions right, the related-party revenue consistent with the Local Files — is a CbCR that does not point anywhere, and the file that is never opened is the file that is never examined.

See also

• Master File
• Local File — Rule 10D
• The documentation pillar guide
• CbCR and Pillar Two
• India compliance calendar