Countries around the world, including India, will get more power to tax big multinationals such as Google, Apple and Facebook doing business within their borders under a proposed overhaul of decades-old rules. The Organisation for Economic Co-operation and Development (OECD) has proposed to expand government rights to tax multinationals, especially big internet firms, by releasing a methodology for such taxation.
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The development is a shot in the arm for India which has proposed its own regulations on taxation of digital companies. “With the OECD report also supporting the right to tax, one would now have to see if and when the CBDT (Central Board of Direct Taxes) finalises the profit attribution rules. This together with the significant economic presence (SEP) amendment could impact several digital companies operating in India,” said Ajay Rotti, partner at Dhruva Advisors.
Source: Economic Times