India has called upon the G-20 countries to urgently fix the issue of taxing profits made by digital economy companies in countries where they do not have significant physical presence.
Finance Minister Nirmala Sitharaman addressed the two-day meeting of the G-20 Finance Ministers and central bank Governors at Fukuoka in Japan yesterday.
In a statement, the Finance Ministry said, as offshore digital companies such as Facebook, Google and Netflix have little presence in India, taxing their profits is not possible. This prompted the government to roll out equalization levy as a tax deducted at source on payments made to them by Indian firms with effect from June 2016.
The statement said, the aim is to bring offshore companies with significant economic presence in India into the tax net to address the shortcomings in taxing the digital economy. However, India opposed attempts by developed countries to formulate an e-commerce policy outside the World Trade Organization framework. The meeting of G-20, grouping of developed and developing countries, concluded yesterday.
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