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India may benefit from G-7 countries’ minimum 15% Corporate Tax Pact
Industry News- Jun 09,21
Experts feel that India is likely to benefit from the global minimum 15% corporate tax rate pact inked by the world's richest G-7 nations. It is a landmark step toward reforming the global tax system.
Experts feel that India is likely to benefit from the global minimum 15% corporate tax rate pact inked by the world's richest G-7 nations. It is a landmark step toward reforming the global tax system. The pact by the Group of Seven (G-7) advanced economies will be presented to the G-20 developing and developed nations in July in Venice. India’s effective domestic rate is above 15% but tax experts say the ability of the country to attract investment will keep it in a good place.
The Finance Ministers of the G-7 advanced economies – comprising the US, UK, Germany, France, Canada, Italy and Japan, finalised a landmark deal of taxing multinational companies (MNCs) at a minimum global tax rate of 15%. They have also agreed to introduce measures to ensure businesses pay taxes in the countries where they operate. This move is aimed at closing loopholes in cross-border taxation.
The decision of the G-7 nations will be presented to the G-20 group of developing and developed nations in a meeting scheduled for July 2021 in Venice.
A statement issued by Mathias Cormann, Secretary-General, Organisation for Economic Co-operation and Development (OECD) mentioned that the agreement among the G-7 nations was a landmark step toward achieving a global consensus necessary to reform the international tax system.
He added that this decision gives the much-needed momentum to the upcoming discussions among the 139 member countries and jurisdictions of the OECD/G20 Inclusive Framework on base erosion and profit shifting (BEPS).
In September 2019, India slashed its corporate taxes for domestic companies to 22% and taxes of new domestic manufacturing units to 15%. The discounted tax rate was extended to the existing domestic companies, subject to certain conditions.
Source – ET Auto
G-7
G-20
minimum global tax rate
global pact
G-7 agreement
domestic companies
corporate tax
international tax system
multinational companies
MNCs
Organisation for Economic Co-operation and Development
OECD
base erosion and profit shifting
BEPS
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