The global tech giants have structured investment arms through a maze of subsidiaries held outside India in jurisdictions such as Singapore, Mauritius and Ireland, which means they pay about 10% tax on revenues, according to the Indian companies.Most Indian companies have to pay 35% tax, they said. Companies basing themselves in low-tax jurisdictions for tax avoidance is called base erosion and profit shifting (BEPS). The term Google tax informally refers to measures aimed at combating this and ensuring that companies pay what they owe in line with revenue generated locally.The tech giants have been slapped with fines in some countries. India has also been looking to tax them and had floated a framework two years ago mandating this for companies with a significant economic presence (SEP) locally. This determined the jurisdiction in which such a company should pay taxes.

Source: Economic Times January 02, 2020 02:15 UTC