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Google, Facebook, other global tech cos likely to get bigger tax bill from CBDT

Image taken from Business World

Global tech giants such as Google, Facebook and others are likely to get a bigger tax bill from the Central Board of Direct Taxes (CBDT) since they invoice their revenues out of India and operate in the country will minimum profits.

The step has been taken in order to bring in some of the revenue from the global operations of the tech majors.

This development comes a month after the income tax department started investigating big tech giants Facebook and Google for underreporting revenues in India to withhold tax on equalisation levy imposed on them.

The scrutiny is in the line of CBDT’s plan to catch tax evaders for the current financial year, which has been one of the big promises by the current government.

According to the sources, Tax officials will be discussing the matter at a meeting of the Organisation for Economic Co-operation and Development (OECD) next month.

OECD, headquartered in France, is a forum for the government of 34 democratic countries with market economies, along with more than 70 non-member countries.

The organisation meets to discuss economic growth, prosperity and sustainable development, and France is one of the first countries to levy the so-called ‘digital tax’ on tech giants.

“We are discussing multiple multiple new ways to define that attribution by including a maximum revenue threshold, beyond which it has to be reported under an India firm,” an anonymous government official said.

While, this consultation with the OECD is part of CBDT’s precautionary measures to amend changes in the tax that would enable the government to impose higher taxes on India units of tech giants.

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Suviral Shukla

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