Transaction tax

India joins global consensus framework to tax multinational corporations


Workers clean the exterior walls of an office building in the central financial district of Mumbai, India, December 4, 2018. REUTERS / Danish Siddiqui / Files

July 2, 2021

New Delhi (Reuters) – India has signed a global consensus deal to tax multinational corporations, the government said on Friday.

Officials from 130 countries, including the G20 and OECD countries, agreed Thursday at the Frankfurt business center in Germany on the outlines of a review of the tax rules for international companies.

“The principles underlying the solution underscore India’s position,” the government said in a statement.

It listed benefits such as greater market profit share, inclusion of demand factors in profit sharing, and tax laws to stop treaty buying.

However, he added that some issues, such as profit sharing and the scope of the tax law, remain unresolved and need to be resolved.

US Treasury Secretary Janet Yellen on Tuesday called on Indian Treasury Minister Nirmala Sitharaman to discuss a “strong global minimum tax”.

This operation requires a tax rate of at least 15%. This is an important factor induced by the administration of US President Joe Biden.

According to the Organization for Economic Co-operation and Development (OECD), which coordinated the global campaign, the implementation plan and remaining issues will be finalized by October and the deal will take place in 2023.

After the deal, Yellen said a global consensus would bring the world closer to ending the ‘race to the bottom’ in taxation, allowing for major investments in infrastructure, education and pandemic rescue packages. .

India supports a consensus solution that is “easy to implement and stick to,” the government said.

“This solution is expected to allocate significant and sustainable revenues to market jurisdictions, especially for developing and emerging markets,” he added.

(Report by Manoj Kumar, edited by Clarence Fernandez)

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