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India scraps its ‘Google Tax’ following OECD settlement
India's government has confirmed it will scrap the 'Google Tax', a charge imposed on foreign companies providing digital services.
Finance Minister Nirmala Sitharaman announced the existing two percent levy would be axed as part of the budget speech for the 2024-25 period, with the change to take effect as of August 1, this year. There was diplomacy behind the change of tack after the US reached a consensus with India back in November 2021 to replace the levy with an international taxation regime following the Organisation for Economic Co-operation and Development (OECD) agreement. As part of the OECD terms, multinational companies would face a minimum tax in the jurisdictions they provide their services, even if they don’t have a permanent establishment in a particular location.
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