India ditches its 'Google Tax' after US waved a big stick
(2024/07/25)
- Reference: 1721883492
- News link: https://www.theregister.co.uk/2024/07/25/india_eliminates_google_tax/
- Source link:
India will eliminate its equalization levy – a charge imposed on digital services provided by non-resident companies, known as the "Google Tax."
The change was announced in Tuesday’s budget, which saw finance minister Nirmala Sitharaman [1]propose [PDF] the levy "shall no longer be applicable on or after 1st August, 2024."
"Some stakeholders have raised concerns that the scope of two percent equalization levy is ambiguous and as a result it leads to compliance burden," [2]explained [PDF] a finance bill-related document released this week.
[3]
The "Google Tax" was introduced in 2016 to ensure digital giants – particularly non-resident ones – pay their fair share of taxes on revenues generated from Indian users. Although its nickname references Google, it's currently paid by companies pulling in over ₹2 crore rupees ($239,000) in revenue per year.
[4]
[5]
The levy initially imposed a six percent tax on payments for online advertising services, particularly coming from those pulling in over ₹1 lakh ($1200) per year. It later broadened to include a two percent tax on e-commerce operators for goods and services supplied to Indian residents.
[6]India backs away from digital services tax after US pressure
[7]US slaps tariffs on countries that hit Big Tech with digital services taxes ... then pauses them immediately
[8]'Data embassies' promise bubbles of digital sovereignty, but India just cooled on the idea
[9]Google slashes maps API prices in India – weeks after a competitor emerged
Digital services taxes are unpopular in the US – the home of Big Tech. The Biden administration [10]hit back with its own tariff of 25 percent for up to $2 billion of goods on nations that implement digital services taxes – although that tariff was [11]immediately suspended .
India's government flagged its intention to wind back the levy [12]in 2021 in recognition of efforts at the Organisation for Economic Co-operation and Development (OECD) to have multinational companies pay at least 15 percent of their revenue as tax in each nation where they do business – a move aimed at discouraging companies shifting funds to tax-friendly jurisdictions. Progress towards the 15 percent goal is currently [13]uneven .
Other items listed in India's new budget are schemes to help small business adopt tech, further government digitalization, more collection of data to inform government decisions and the tools to analyze it, and investment in capacity to produce critical minerals needed for electronics manufacturing.
[14]
Digital infrastructure to assist the agricultural sector is also on the agenda, as are programs to boost hiring in the manufacturing sector. ®
Get our [15]Tech Resources
[1] https://www.indiabudget.gov.in/doc/budget_speech.pdf
[2] https://www.indiabudget.gov.in/doc/memo.pdf
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZqIiSAJatGOftiCUr-t1CgAAAA8&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZqIiSAJatGOftiCUr-t1CgAAAA8&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZqIiSAJatGOftiCUr-t1CgAAAA8&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2021/11/26/india_equalisation_levy_windback/
[7] https://www.theregister.com/2021/06/03/us_digital_services_tax_tarrifs/
[8] https://www.theregister.com/2024/07/24/data_embassies/
[9] https://www.theregister.com/2024/07/19/google_maps_india_price_cuts_ola_response/
[10] https://www.theregister.com/2021/06/03/us_digital_services_tax_tarrifs/
[11] https://www.theregister.com/2021/10/22/us_drops_dst_tariff_threat/
[12] https://www.theregister.com/2021/11/26/india_equalisation_levy_windback/
[13] https://www.pwc.com/gx/en/services/tax/pillar-two-readiness/country-tracker.html
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZqIiSAJatGOftiCUr-t1CgAAAA8&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[15] https://whitepapers.theregister.com/
The change was announced in Tuesday’s budget, which saw finance minister Nirmala Sitharaman [1]propose [PDF] the levy "shall no longer be applicable on or after 1st August, 2024."
"Some stakeholders have raised concerns that the scope of two percent equalization levy is ambiguous and as a result it leads to compliance burden," [2]explained [PDF] a finance bill-related document released this week.
[3]
The "Google Tax" was introduced in 2016 to ensure digital giants – particularly non-resident ones – pay their fair share of taxes on revenues generated from Indian users. Although its nickname references Google, it's currently paid by companies pulling in over ₹2 crore rupees ($239,000) in revenue per year.
[4]
[5]
The levy initially imposed a six percent tax on payments for online advertising services, particularly coming from those pulling in over ₹1 lakh ($1200) per year. It later broadened to include a two percent tax on e-commerce operators for goods and services supplied to Indian residents.
[6]India backs away from digital services tax after US pressure
[7]US slaps tariffs on countries that hit Big Tech with digital services taxes ... then pauses them immediately
[8]'Data embassies' promise bubbles of digital sovereignty, but India just cooled on the idea
[9]Google slashes maps API prices in India – weeks after a competitor emerged
Digital services taxes are unpopular in the US – the home of Big Tech. The Biden administration [10]hit back with its own tariff of 25 percent for up to $2 billion of goods on nations that implement digital services taxes – although that tariff was [11]immediately suspended .
India's government flagged its intention to wind back the levy [12]in 2021 in recognition of efforts at the Organisation for Economic Co-operation and Development (OECD) to have multinational companies pay at least 15 percent of their revenue as tax in each nation where they do business – a move aimed at discouraging companies shifting funds to tax-friendly jurisdictions. Progress towards the 15 percent goal is currently [13]uneven .
Other items listed in India's new budget are schemes to help small business adopt tech, further government digitalization, more collection of data to inform government decisions and the tools to analyze it, and investment in capacity to produce critical minerals needed for electronics manufacturing.
[14]
Digital infrastructure to assist the agricultural sector is also on the agenda, as are programs to boost hiring in the manufacturing sector. ®
Get our [15]Tech Resources
[1] https://www.indiabudget.gov.in/doc/budget_speech.pdf
[2] https://www.indiabudget.gov.in/doc/memo.pdf
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZqIiSAJatGOftiCUr-t1CgAAAA8&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZqIiSAJatGOftiCUr-t1CgAAAA8&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZqIiSAJatGOftiCUr-t1CgAAAA8&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2021/11/26/india_equalisation_levy_windback/
[7] https://www.theregister.com/2021/06/03/us_digital_services_tax_tarrifs/
[8] https://www.theregister.com/2024/07/24/data_embassies/
[9] https://www.theregister.com/2024/07/19/google_maps_india_price_cuts_ola_response/
[10] https://www.theregister.com/2021/06/03/us_digital_services_tax_tarrifs/
[11] https://www.theregister.com/2021/10/22/us_drops_dst_tariff_threat/
[12] https://www.theregister.com/2021/11/26/india_equalisation_levy_windback/
[13] https://www.pwc.com/gx/en/services/tax/pillar-two-readiness/country-tracker.html
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZqIiSAJatGOftiCUr-t1CgAAAA8&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[15] https://whitepapers.theregister.com/
Curious?
Bebu
Does Google even pay as much as 15% of the revenue they generate within the US as tax to the IRS.
Seemed odd that the link to this OECD initiative is to a PWC site - a bit like having the wolves in charge of the sheep I would have thought given how much of the work of PWC and their ilk involves tax avoidance minimization (often transnational.)
Bow down
Zibob
Do it now, for the great corporations of the world police.
Good too see the US gov fighting for poor little Google, but doing nothing for poor little people who cant even take a day off work because their kid is sick.
Who needs enemies when you have a government like that helping you...