TOUGH times lie ahead for tax dodgers operating in digital space. As part of BEPS project, the OECD has floated a Consultation Paper, proposing measures to prevent large tech companies from avoiding taxes by transferring their profits to low-tax jurisdictions.
The Consultation Paper states that even if MNCs like Facebook, Amazon, Apple and Netflix do not operate within the borders of a country, they can still be taxed. The new tax regime is going to apply not only to tech companies but all such entities which operate in the online space.
The new framework, the OECD hopes, would earn international agreement on digital taxation by 2020. The turnover benchmark the OECD proposes is above USD 825 mn for application of the digital tax.
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