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Many countries have confirmed the global tax agreement and some have already given MLAs to its provisions in their national laws.
As long as these countries post their laws retrograde by the US, they will continue the rights and responsibility to tax the digital company’s profits and also determine whether multilateral companies will pay minimum 15 percent tax on their global profits Are doing and if it is not then this is not the case, to recover the difference tax. It is not going to be easy, however, they are also bound by the old tax treaties with the US.
OECD, of which America is the most prominent member, has said that it will continue to work with US authorities to find a solution. However, such a possibility is almost impossible in the current context.
India has three options.
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First, play with OECD/G20 and those who intend to live in it, tell the US to find a ‘plurilator solution’ and then take appropriate action accordingly.
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Second, comfortable for the US, because it is doing tariffs and other matters, and aligns its tax laws to suit American laws.
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Third, re -see your ‘permanent installation’, ‘transfer pricing’ and ‘important economic presence’ rules – Borrow from the global tax deal – to ensure that physical companies pay taxes to their domestic companies in India at rates She makes those who earn on their profits in India. , And to determine the profits of digital companies appropriately and to ensure that they pay income tax on their profits in a proper way.
Transfer is the right choice for pricing pricing and strengthening the general/particular tax oblige regulations and to capture the correct profits of modernization physical companies. However, due to the underlying challenge in determining the price of hand lengths in any transfer pricing governance, India can also think of subjugating foreign companies to an estimated overall income tax regime.
India abolished its equivalent levy for digital companies with influence from 1 August 2024. The most obvious option is to bring back the equivalent levy in the way of correction, using the principles agreed in the global tax deal.
(Subhash Chandra Garg is the Chief Policy Advisor, Subhanjali, and the Secretary of East Finance and Economic Affairs, Government of India. He is the author of several books, including ‘$ 10 trillion dream dent, we also make policy, and clarify and comment on budget 2024-25’This is an opinion piece, and above the idea expressed above the author. The Quint Neither endors nor responsible for the same.)
