Digital companies scramble to save on tax as India tightens data laws

MUMBAI: Global digital giants are scrambling to explore and find ways for tax arbitrage to get around India’s personal data protection bill that requires them to have their servers and data in India, said four people close to the development.

The fear for companies such as Google, Facebook, Netflix, Amazon and LinkedIn is that if the servers sit in India, it would be seen as a permanent establishment (PE) and will eventually attract higher tax. PE is a concept in taxation that determines which country has the right to tax a multinational’s income and to what extent.