India may use BEPS route to tax digital entities like Google, Facebook

In the 2018-19 Budget, India has taken a global lead to tax digital entities with large user base or business in a country by proposing to suitably amend the Income Tax Act

Sensing that the Union Budget’s intention to tax Facebook, Netflix, or Google may take years to materialise, India may propose it strongly under the international tax framework of the Organisation for Economic Co-operation and Development.

The framework, technically called the multilateral instrument (MLI) to implement tax-related measures to prevent base erosion and profit shifting (BEPS), will avoid the need to amend individual bilateral treaties.

In the 2018-19 Budget, India has taken the lead to tax digital entities with a large user base or business in the  country by proposing to suitably amend the Income Tax (I-T) Act. However, the existing