India and the US have agreed for a transitional approach on equalisation levy or digital tax on e-commerce supplies beginning April 1, the finance ministry said on Wednesday. The final terms of the agreement for the digital tax — also called Google tax — will be ready by February 1.
On October 8, 136 countries, including India, have agreed to an overhaul of global tax norms to ensure that multinationals pay taxes wherever they operate and at a minimum 15 per cent rate.
On October 21, the US, Austria, France, Italy, Spain and the UK reached an agreement on a transitional approach to existing unilateral measures
“India and the US have agreed that the same terms . shall apply between the US and India with respect to India's charge of 2 per cent equalisation levy on e-commerce supply of services and the US’s trade action regarding the said Equalisation Levy. “However, the interim period that will be applicable will be from April 1, 2022, till implementation of Pillar One or March 31, 2024, whichever is earlier,” the ministry said.
