NEWS

A MONTH SINCE LAUNCH, GLITCHES CONTINUE TO

MAR INCOME TAX PORTAL FUNCTIONING.
A month after its launch and two weeks after the finance minister
reviewed its functioning, technical glitches continue to mar the
functioning of the new income tax portal as certain key utilities like
e-proceedings and digital signature certificate are not yet functional,
say chartered accountants. Also, some overseas firms have been
facing problems in logging in to the portal, they said.

INDIA TO STRIVE FOR HIGHER SHARE OF MNC DIGITAL

TAX
Synopsis
India on Friday joined 130 countries in the G20-OECD inclusive framework to
reform international tax rules to create a new global tax regime on which there
is a broad agreement, but details are yet to be worked out.

NEW DELHI: India will work with like-minded countries to ensure

developing countries like itself get a fair share in the proposed tax on
multinational digital companies under a global deal being worked
out, a top government official told ET.
Framework of the proposed tax – which would apply to multinational
enterprises with global sales of more than ₹20 billion and over 10%
profitability – and its implementation is expected to be worked out
by the Organisation for Economic Cooperation and Development
(OECD) by October.
India will have to withdraw the equalisation levy, or the so-called
Google Tax, introduced in 2016, when the global tax deal is
implemented.
India provides a high user base to multiple global ecommerce
platforms and wants to ensure that it gets a fair share in revenues,
and that the formula agreed upon is balanced and has a wider
coverage than currently envisaged.
The proposed framework has two pillars.
Pillar 1 seeks to ensure a fairer distribution of profits and taxing
rights among countries with respect to the largest multinational
enterprises, including digital companies.
Pillar 2 seeks to put a floor on competition over corporate income
tax by introducing a global minimum corporate tax rate.

As per the proposal, large multinational enterprises’ profit in excess

of 10% of revenue will be allocated to market jurisdictions with
nexus using a revenue-based allocation. The exact portion of profits
to be reallocated has not been finalised and negotiations on these
are expected to gather steam in the coming weeks.
Extractive and regulated financial services have obtained a carve-out
from this proposal.
AGREEMENT ON GLOBAL DIGITAL TAX LIKELY TO
BOOST INDIA-US TRADE NEGOTIATIONS

NEW DELHI: The success of global tax treaty will pave the way for
the India-US trade negotiations which were stuck over digital tax,
officials in Commerce Ministry claims. “The digital tax imposed on
large US multinationals like Google, Facebook, Amazon was one of
the stumbling block during the trade negotiations between the two
countries. After the success of global tax treaty, this matter will be
automatically resolved and will pave way for fresh negotiation,” a
senior official from commerce ministry said.