OECD Tax Convention

Washington has said that India, China and Australia remain hold-outs on U.S. demands over alternative ways to calculate transfer pricing

Global minimum tax of 15 per cent will come into effect from next year and by 2025 almost 90 per cent of MNCs having revenues of more 750 million euros will be subject to the levy in every country of operation, said OECD in its report to G20. "The implementation of the global minimum tax is now well underway and will come into effect from the beginning of next year," the Organisation for Economic Cooperation and Development (OECD) said in a report to G20 finance ministers and central bank governors. The OECD said that till date, around 50 jurisdictions have taken steps to implement the global minimum tax. This figure includes half the members of the G20 and all the member states of the European Union. "The implementation of the global minimum tax continues to gather speed and we estimate that by 2025 almost 90 per cent of global multinational enterprises (MNEs) with revenues above EUR 750 million will be subject to a minimum effective tax rate of 15 per cent in every jurisdiction ..

There is little consensus among experts on whether or not the deal will bring in more revenues to India than the equalisation levy

In addition, countries agreed not to impose new digital services taxes as of Friday

Details of new global agreement will need to be scrutinised

Officials in the Finance Ministry said that the terms of negotiations of the global tax deal have taken all the inputs that India had shared over the years

The latest proposal by Washington, shared with 130 countries, aims to tax only those entities with a global revenue of $20 bn and is not limited to digital players

Some countries including France have postponed their own laws to give a multilateral solution a chance

The Convention will operate to modify tax treaties between two or more parties to the Convention