The government is looking to set a revenue threshold of Rs 20 crore and a limit of 500,000 users above which non-resident technology companies such as Google, Facebook and Twitter will have to pay direct taxes on profits earned locally, multiple sources in the know of the matter said.
These limits are part of the ‘Significant Economic Presence’ (SEP) concept that was introduced in the budget last year.
ET has learnt that the government is also considering if the SEP could be made a part of the draft Direct Taxes Code, which seeks to consolidate laws relating to direct taxes. The draft is expected to be submitted to the finance ministry soon.
Multinational tech companies have been accused of paying very little taxes locally despite earning significant revenue and profits from offering services such as online advertising to customers in India.
It also comes at a time when lawmakers globally, especially in the European Union, are looking at ways to tax Big Tech on profits and revenue generated locally.
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Google, Facebook and Twitter did not respond to ET’s queries on the subject till press time.
Global corporations with more than 1 million registered users in India, or those with over 100 paying customers, or ones earning revenue of over Rs 10 crore from customers in India should invoice locally, community feedback platform LocalCircles said in a letter to revenue secretary Ajay Bhushan Pandey on Monday.
Source: Economic Times
