Google, Facebook may face tax in line with India business

MUMBAI: Multinational enterprises (MNEs) such as Google, Facebook, Amazon and Netflix (to name a few), which have a huge consumer base in several countries but no physical presence, may in the coming year or two be dealing with a new global tax mechanism.
Under this new system, ‘some’ profits and corresponding taxing rights will be re-allocated to countries where the consumers (markets) are based. This move is part of the draft Secretariat proposal, released by the Organisation for Economic Co-operation and Development (OECD), on Wednesday. The proposed rules will determine where tax should be paid (nexus rules) and on what portion of profits they should be taxed (profit-allocation rules). A global consensus is aimed to be achieved by end of 2020.
The stakes are high for India, as highly digitalised global companies have a huge consumer base here. For instance, there are over 270 million Facebook users in India, making it one of the leading countries in terms of user size.