G7's new global tax plan on MNCs may be a windfall for India, and a big setback for tax havens. The decision to allow countries to tax companies that have 'no physical presence but substantial sales' will be particularly beneficial.
The Group of Seven or G7 countries have agreed on a "historic" deal to impose a global tax on multinational corporations. The proposal is aimed at reducing tax evasion committed by large multinational corporations that often shift their base of operations to regions with lower tax rates.
tax The deal agreed in principle by the finance ministers of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States is likely to be put before a G20 meeting in July.
While tax havens like Netherlands, Ireland, Luxembourg, Cayman Islands and Hong Kong will feel the repercussions of such a deal, countries like India stand to gain a lot.