Global minimum tax: India at the last stage of finalising details says FM

Finance Minister Nirmala Sitharaman said that India is almost at the end stage of finalising the details of the G20’s two-pillar taxation proposal, according to a report in The Hindu. In July, a total of 130 countries agreed to alter global tax laws to ensure that multinational corporations pay taxes at a minimum of 15% wherever they operate. After working out the technical elements of the proposal, the Finance Ministry stated that several key concerns, such as share of profit allocation and extent of subject to tax regulations, have yet to be resolved, and that a “consensus agreement” is expected by October.

There are two components of the proposed two-pillar system. Pillar I- It involves reallocating an additional share of earnings to market jurisdictions, and Pillar II consists of a minimum tax and is subject to tax laws.

Sitharaman said the two-pillar solution to the international taxation issue will reach an advanced implementation stage, which India will have to trial, at the ICRIER’s Annual International G20 Conference.

“We’re quite close to deciding on the specifics of the two-pillar approach at this point. We had already discussed and agreed on a framework… We’re nearing the end of the process of finalising the details. So I don’t think it’s time for me to speak out the specifics of what we’ve agreed on, but these are the topics that are now being discussed “Sitharaman stated.