Thursday, December 2nd, 2021

Corporate tax: 136 countries agree on minimum 15%, India will benefit

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Agency, New Delhi

Published by: Dev Kashyap
Updated Sun, 10 Oct 2021 01:50 AM IST

Summary

Deloitte India partner Sumit Singhania said on Saturday that this will help in meeting the challenges of digitalisation. He said that after Ireland and Hungary agreed, a political consensus has been reached on this agreement in 136 countries, including the G20 and all OECD countries. By 2023, the agreement will result in redistribution of 125 billion tax benefits annually and MNCs will pay a minimum tax of 15 percent.

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136 countries of the world including India have agreed to keep the corporate tax rate at a minimum of 15 percent. Deloitte India partner Sumit Singhania said on Saturday that this will help in meeting the challenges of digitalisation. It is believed that India can get the benefit of this agreement. This agreement will also help in cutting down on the countries safe for tax evasion of the world.

Singhania said that after Ireland and Hungary agreed, a political consensus has been reached in 136 countries including the G20 and all OECD countries. He said that by 2023, if the agreement comes into force, there will be a redistribution of 125 billion tax benefits annually and MNCs will pay a minimum of 15 percent tax.

In a statement, Singhania said the global community’s move towards a two-pillar solution of the OECD Inclusive Framework is a major step forward in tackling the international tax challenges of digitisation. He said the newly enacted ‘Nalpability and Profit Allocation Rules’ (Column 1) and ‘Global Minimum Tax Rules’ (Column 2) would ensure that large multinationals would pay a substantial part of the tax in India.

Simply put, column one deals with the sharing of additional profit margins between different countries, and column two deals with tax rules and minimum tax. The agreement is to come into force by 2023 but the deadline for implementing Pillar II has been extended to 2024.

Announcing this agreement on Friday, the Organization for Economic Cooperation and Development (OECD) said that the lawmakers of every country will have to ratify this agreement only then it will come into force, but 136 countries reaching this agreement is a big achievement in itself. Is.

India will benefit
Deloitte India Partner said that with this change, India will also have to share the tax net of its large companies with other countries. However, being a huge market for global multinationals, India will ultimately benefit from this tax reform agreement. This tax reform agreement will replace hundred years old international tax rules.

Taxes already levied will have to be abolished
However, upon the implementation of this agreement, all countries will have to abolish all types of digital service tax and other such tax structures. India will also have to commit to abolishing taxes like Digital Service Tax or Equalization Levy under this. The agreement provides that no such new tax will be levied on any company from October 8 to December 31, 2023.

Expansion

136 countries of the world including India have agreed to keep the corporate tax rate at a minimum of 15 percent. Deloitte India partner Sumit Singhania said on Saturday that this will help in meeting the challenges of digitalisation. It is believed that India can get the benefit of this agreement. This agreement will also help in cutting down on the countries safe for tax evasion of the world.

Singhania said that after Ireland and Hungary agreed, a political consensus has been reached in 136 countries including the G20 and all OECD countries. He said that by 2023, if the agreement comes into force, there will be a redistribution of 125 billion tax benefits annually and MNCs will pay a minimum of 15 percent tax.

In a statement, Singhania said the global community’s move towards a two-pillar solution of the OECD Inclusive Framework is a major step forward in tackling the international tax challenges of digitisation. He said the newly enacted ‘Nalpability and Profit Allocation Rules’ (Column 1) and ‘Global Minimum Tax Rules’ (Column 2) would ensure that large multinationals would pay a substantial part of the tax in India.

Simply put, column one deals with the sharing of additional profit margins between different countries, and column two deals with tax rules and minimum tax. The agreement is to come into force by 2023 but the deadline for implementing Pillar II has been extended to 2024.

Announcing this agreement on Friday, the Organization for Economic Cooperation and Development (OECD) said that the lawmakers of every country will have to ratify this agreement only then it will come into force, but 136 countries reaching this agreement is a big achievement in itself. Is.

India will benefit

Deloitte India Partner said that with this change, India will also have to share the tax net of its large companies with other countries. However, being a huge market for global multinationals, India will ultimately benefit from this tax reform agreement. This tax reform agreement will replace hundred years old international tax rules.

Taxes already levied will have to be abolished

However, upon the implementation of this agreement, all countries will have to abolish all types of digital service tax and other such tax structures. India will also have to commit to abolishing taxes like Digital Service Tax or Equalization Levy under this. The agreement provides that no such new tax will be levied on any company from October 8 to December 31, 2023.

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