Cracks Begin to Appear in OECD Over Deal to Tax Global Tech Firms

Cracks have begun to appear in the bloc representing the world’s richest nations on reaching a deal over taxing global technology majors such as Google and Facebook. Any delay will mean a country like India can continue with an equalization levy on the tech major’s earnings.

Several low-tax countries, such as Ireland, Cyprus and Barbados, are opposing the tax deal pushed by the Organisation for Economic Cooperation and Development (OECD), which represent the bulk of the planet’s industrial economies. Republicans in the US have also threatened to derail President Joe Biden’s attempts to adopt the Base Erosion and profit shifting (BEPS) framework that several countries are seeking to use to plug tax loopholes. The framework, which India is also seeking to adopt, was aimed at global tech giants that large economies think are escaping taxes.

India is keen to adopt the framework but also meant withdrawing the equalization levy-a unilateral tax served on the advertising and other revenues of companies such as Google, Facebook, Amazon and Twitter.

India was expected to adopt the deal and let go of the levies by next year.

“The communique issued by the G20 and the statement by our ministry of finance make it clear that there is more work it clear that there is more work to be done on arriving at an acceptable solution,” said Ajay Rotti, partner, Dhruva Advisors. S-ET

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