Global Minimum Tax – The Antidote for Race to The Bottom

Can the global tax deal become an ideal Antidote for Race to the Bottom? Article by Sunil Arora, Partner and Ameet Baid, Sr. Manager, Taxation

In recent years the G20/OECD have made various efforts to discourage MNCs and various technology giants from shifting their profits and tax revenues to low or no tax jurisdictions regardless of the location of the sale. This is done to avoid paying higher taxes. In order to prevent this form of tax erosion, world leaders have moved to agree on a Global Minimum Tax (GMT) as of 2021.

Most countries had been eager to see this in motion, including india, and a GMT at 15% has been agreed upon. 136 countries have joined in on this agreement. This article outlines the various implications and factors in regards to the GMT and the process of its approval. Ameet Baid and Sunil Arora has also dived deeper into the Indian Narrative of the GMT with regards to the changes it would bring in India as well as the an assessment of the Impact that it creates. Also discussed in this article is the answer to the question of whether GMT can be the “antidote” for problems faced by many economies against the Race to the Bottom tax competition. Published on Taxmann

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