India to seek for higher share under global tax regime

According to the officials, India will work with other nations of similar interest to get a fair share in the proposed tax deal for the multinational digital firms. On 2^nd July 2021, India joined 130 nations in G20-OECD inclusive framework. The tax framework focuses on the guidelines to create a global tax regime.

An Indian official said “We would speak to like-minded countries… We should get a better deal.” The propsed tax is expected to be cover companies multinational companies with more than INR 20 billion and over 10% profitability. The framework for tax regime is expected to be out by October 2021. The implementation of deal is expectd to be from 2023.

India might need to take back its equalisation levy when global tax deal become applicable. Thus, the country needs to ensure that its tax earnings from the new regime are more than its earning from equilisation levy. Vikas Vasal, nationwide managing companion – tax, at Grant Thornton Bharat LLP, said, “It is likely that India would review the finer details in respect of allocation of profits and taxation rights vis-à-vis the tax foregone towards equalisation levy and share its perspective when the formulae is discussed and agreed upon.”