The G20/OECD Inclusive Framework Tax Agreement has been signed by India.
Highlights:
Most members of the G20/OECD Inclusive Framework for Basic Erosion and Profit Shifting, including India, passed a high-level statement containing an outline of a consensus solution to the taxation challenges posed by the digitalization of the economy.
The proposed solution is consists of two components:
Pillar One, which consists of re-allocating an additional share of profit to market jurisdictions; and
Pillar Two, which consists of a minimum tax and is subject to tax rules.
Some significant issues, such as profit allocation and the scope of subject to tax rules, remain unresolved and must be addressed.
Furthermore, the proposal’s technical details will be worked out in the coming months, with a consensus agreement expected by October 2021.