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Multinational companies are worried about sharing details of their overseas operations with Indian tax authorities, according to an Economic Times report.
Fear stems from the fact that once the information on their tax structures is made public, it will put them on the radar of overseas tax authorities, sources told The Economic Times.
Since last November, the Central Board of Direct Taxes (CBDT) has made it mandatory for multinational firms to furnish country by country (CbC) report on their taxes.
Under the rules, MNCs will have to maintain a Master File with information on lenders, debtors, and intellectual property in each location. The firms will also have to provide financials of subsidiaries contributing to more than 10 percent of a firm's revenue or profit.
Confidentiality is one of the reasons why the firms are apprehensive, but another reason could be that some of the companies may have not submitted tax information in certain countries. So if an MNC submits the data in India, it would highlight inconsistency.
"Whatever they submit in India, multinationals will have to maintain that in every country," a legal expert told The Economic Times.
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