India has joined Organisation for Economic Co-operation and Development (OECD) and G20 Inclusive Framework tax deal. Majority of the members of OECD and G20 countries adopted yesterday a high-level statement containing an outline of a consensus solution to address the tax challenges arising from the digitalisation of the economy.
The proposed solution consists of two components- reallocation of additional share of profit to the market jurisdictions and minimum tax subject to tax rules.
However, the technical details of the proposal will be worked out in the coming months and a consensus agreement is expected by October.
The principles underlying the solution vindicates India’s stand for a greater share of profits for the markets.
India is in favour of a consensus solution which is simple to implement and simple to comply. At the same time, the solution should result in allocation of meaningful and sustainable revenue to market jurisdictions, particularly for developing and emerging economies