‘India actively participating in global minimum tax regime effort’
Chaudhary said that on 1 July, majority of the members of OECD and the G20 adopted a high level statement which includes continuing work for an agreement on a global minimum tax with a rate of at least 15% on a country-by-country basis
India is actively working with other nations in framing the new global minimum tax regime, minister of state for finance Pankaj Chaudhary informed Lok Sabha on Monday.
The minister’s written statement in response to a question underlines New Delhi’s commitment to the new regime, which will also yield the Indian government taxation rights on new age companies that serve Indian consumers remotely through digital means.
Chaudhary said that on 1 July, majority of the members of Organisation for Economic Cooperation and Development (OECD) and the G20 adopted a high level statement which includes continuing work for an agreement on a global minimum tax with a rate of at least 15% on a country-by-country basis.
The minimum corporate tax is intended to ensure that large and profitable multinational enterprises pay a certain minimum level of tax on their income. It is targeted primarily at low or no tax jurisdictions and seeks to curb unhealthy tax competition, profit shifting and treaty abuse, the minister said. The member jurisdictions have agreed to carry out further work so as to reach an agreement on a minimum corporate tax regime, he said. “India is actively participating in this work," the minister said.
The move is significant as it enables India and most other nations to widen their tax base and find the badly needed revenue resources. India has committed to roll back its equalisation levy on digital services once the new global tax regime is in place.
Such levies by India and other countries are already a subject of friction between these countries and the US. Washington recently gave six countries, including India, 180 days to complete multilateral talks on the proposed global taxation framework. These countries are on a US target-list for retaliatory tariffs.
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