India backs OECD-G20 tax deal, ‘consensus agreement’ seemingly by Oct

India and majority of the members OECD-G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) have adopted define of a consensus answer to handle the tax challenges arising from the digitalisation of economies. The ideas underlying the answer vindicates India’s stand for a higher share of income for the markets and consideration of demand facet components in revenue allocation.
The new framework additionally seeks to handle issues over cross-border revenue shifting and usher in subject-to-tax rule to cease treaty buying. The proposed answer consists of two elements: Pillar One, which is about reallocation of extra share of revenue to the market jurisdictions, and Pillar Two consisting of minimal tax and topic to tax guidelines.

“Some significant issues including share of profit allocation and scope of subject to tax rules, remain open and need to be addressed. Further, the technical details of the proposal will be worked out in the coming months and a consensus agreement is expected by October,” the Finance Ministry stated in an announcement. FE