India adopted the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting to address the tax challenges arising from the digitalisation of the economy.
Daily Current Affairs Quiz 2021
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.
Some significant issues including share of profit allocation and scope of subject to tax rules, remain open and need to be addressed.
India is in favour of a consensus solution which is simple to implement and simple to comply. At the same time, the solution should result in allocation of meaningful and sustainable revenue to market jurisdictions, particularly for developing and emerging economies.