The government wants a more balanced principle for the taxation based on place of revenue generation.
The Indian method focuses on revenue, wherein income is apportioned to each jurisdiction in line with operations there, which the official said would be fair to everyone and simpler to operate.
India has sought changes in the Organisation for Economic Cooperation and Development (OECD) proposal on digital taxation, saying it would deny the country its proper share of taxes from multinationals such as Google, Facebook, Uber and Netflix, which generate substantial revenues locally.
The government has proposed a more balanced principle for the taxation of such companies based on place of revenue generation.
“We want a fair share in revenues that accrue to the company from the country,” said a government official aware of the development. India has submitted its concerns to the body. The OECD had on October 9 released a draft on taxing digital companies for public comment. Discussions on the proposal are to be held on November 21-22. All countries have to agree for the rules to be enforced.
India imposed a 6% equalisation levy on online advertising in 2016. Under this, the levy is withheld by the recipient of services from the payment it’s making for services.
Source: The Economic Times