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Organisation For Economic Co-operation And Development (OECD) And G20

Organisation For Economic Co-operation And Development (OECD) And G20:

India has joined the Organisation for Economic Co-operation and Development (OECD) and G20 Inclusive Framework tax deal of global corporate tax.

  • Majority of the members OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting(including India)adopted a high-level statement containing an outline of a consensus solution to address the tax challenges arising from the digitalisation of the economy.
  • The proposed solution consists of two components –
    • Pillar One which is about reallocation of additional share of profit to the market jurisdictions and
    • Pillar Two consisting of minimum tax and subject to tax rules.
  • Further, the technical details of the proposal will be worked out in the coming months and a consensus agreement is expected by October.
  • Base Erosion and Profit Shifting (BEPS) refers to tax-avoiding strategies used by big multinational companies that exploit the gaps and mismatches in tax rules across the globe.