Pushing for a G20 action plan to combat tax evasion, India today said it should not be seen as an attempt to go after multinational companies, some of whom exploit loopholes to avoid billions in taxes, but made it clear they should pay what is due to the country where they operate.
Economic Affairs Secretary Arvind Mayaram said the country's tax rules are as much applicable to foreign companies as it is for Indian firms.
"India is not going after them (MNCs)," Mayaram said, adding the foreign companies must pay what is due. It would be wrong to suggest that India is going after MNCs, he said.
Mayaram was talking to reporters accompanying Prime Minister Manmohan Singh on his visit to the Russian city of St Petersburg for the eighth summit of the Group of 20 industrialised and major emerging economies.
He was asked whether the plans by the G20 to deal with tax evasion and avoidance would send a signal that MNCs are being targeted at a time when they do not need disincentives to invest during the current phase of global volatility which has severely hit big emerging economies like India.
Replying to questions, Mayaram said there is a resonance of India's position in the G20 on the need to develop "new standards" through consensus so that countries do not lose tax due to them.
Cooperation against tax evasion is among the key areas that will be deliberated by G20 leaders at the two-day summit starting tomorrow.
The G20 has already backed a fundamental rethink of the rules on taxing MNCs, taking aim at loopholes used by some top companies to avoid billions of dollars in taxes.
The Organisation for Economic Cooperation and Development (OECD), which has been tasked with working on an action plan to combat tax evasion, is to report on its work on Friday.
A key objective is to tackle techniques of what is known as tax optimisation, meaning accounting arrangements used by multinational businesses to minimise their tax bills.
