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Staff of Reuters Read for 2 minutes (Reuters) – NEW DELHI (Reuters) – The government of India said on Friday that it has signed a global framework agreement to tax multinational corporations, an endeavor backed by the United States. On December 4, 2018, a worker cleans the façade of an office building in Mumbai’s major financial district, India. Danish Siddiqui/FILES/REUTERS Officials from 130 countries, including G20 and OECD members, agreed on the main elements of an overhaul of regulations for taxing foreign corporations on Thursday in Frankfurt, Germany’s commercial capital. “The solution’s principles vindicate India’s position,” the ministry stated in a statement. It mentioned benefits such as a larger proportion of earnings for the markets, profit allocation that considers demand-side considerations, and tax laws that prevent treaty shopping. However, several issues, such as profit-sharing and the scope of tax rules, remain unresolved, according to the report. On Tuesday, United States Treasury Secretary Janet Yellen encouraged Indian Finance Minister Nirmala Sitharaman to explore a “strong global minimum tax.” The agreement asks for a baseline tax rate of at least 15%, a key demand of US President Joe Biden’s administration. According to the Organisation for Economic Cooperation and Development (OECD), which coordinated the global campaign, an implementation plan and outstanding issues will be finalized by October, with the accord scheduled to be implemented in 2023. Following the accord, Yellen stated that global consensus will bring the world closer to stopping the “race to the bottom” on taxation, allowing for essential expenditures in infrastructure, education, and pandemic relief. According to the administration, India prefers a consensual approach that is “easy to implement and comply with.” “The solution should result in meaningful and long-term revenue allocation to market jurisdictions, particularly for poor and emerging nations,” it continued. Manoj Kumar contributed reporting, and Clarence Fernandez edited the piece./nRead More

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