Art & Culture
- Right to access internet is fundamental right declares Kerala High Court
- Legal rights of Deities in India, Difference in Natural and Juristic Person
- Bru refugees refuse to return to Mizoram
- No animal sacrifice in Tripura temple-Orders High Court
- EC’s Order on Reducing Sikkim CM’s Disqualification Period
- Law Ministry issues corrigendum to Jammu and Kashmir Reorganisation Act
- Appointment of the Judges in India.
- New Chief Justice of India- How is CJI appointed?
- Indian Penal Code 1860, HM Amit Shah wants to Overhaul IPC
- National Population Register (NPR) 2020
- Whistle Blowers Allegations on Infosys
Governance & Social Justice
- 60% girls in Delhi colleges anaemic
- Niti aayog’s School education quality index
- Multipurpose National Identity Card
- Population pyramid : India Vs China, Demographic dividend Phase of India
- UN Population Report, India will become the most populous country by 2027
- Supreme Court upholds SC and ST (Prevention of Atrocities) Amendments Act
- Comparing Population Pyramids of India and China
- Waqf boards-Their governance and purpose
- Harvard Admissions Case
- Pradhan Mantri Jan Arogya Yojana- Ist Anniversary, Problems and solutions
- Significance of sexual and Reproductive Health-Status of reproductive services in India
- Pregnancy in Old Age, What is In Vitro Fertilisation-Risks and legal shortcomings
- Supreme Court Judgement on NGOs and RTI
- Social Stock Exchange
- Rajasthan Govt changes EWS norms, Sets Rs 8 lakh family income as only criteria
- Global hunger index 2019
- No Government job for those with more than two kids
- Ranitidine CANCER risk
- IIT Council Introduces Tenure track system
- Bangladesh growing faster than India ?
- Cyprus dispute explained
- Donald Trump impeachment
- India wins Hyderabad Nizam case against Pakistan
- India’s reply to Pakistan at UNGA
- Prime Minister of Malaysia calls India and invader in Kashmir
- Should India recognise the armenian genocide ?
- Why are CARICOM countries important for India ?
- Why are countries leaving OPEC ?
- Attacks on Saudi Oil facilities
- Organization of Islamic Cooperation issues statement on Jammu and Kashmir
- Sri Lanka’s relations with India & China
- US troops start pullout in Syria as Turkey prepares for operation
- What are Vanilla Islands?
- India-USA trade deal
- UNHCR Nansen Refugee Award-2019
- Modi – Xi Informal meet at Mamallapuram – Historic Chinese links
- India China informal summit in Tamil nadu
- Pakistan save from FATF blacklist till 2020
- USA blacklists China organisations over Uighur Muslim abuse
- Why is Chile burning ?
- Why is the Philippines important for India
- Xi jinping Nepal visit 2019 and impact on India
- India Pakistan Cross LOC Trade suspended, Should India revoke suspension?
- Protests in Lebanon
- Chennai to Vladivostok Sea Route
- End of baghdadi
- Indian government’s security advisory
- Indians no longer require Visa to visit Brazil
- Non Aligned Movement 2019 summit
- US backed Ceasefire between Turkey and Kurds
- Pakistan stops postal exchange with India
- China’s GDP growth slows to 6% slowest in 27 years
- Common Goods for Health project by WHO
- Turkey attack Kurds in Syria
- Behavioural Aspect of Farmer Suicide
- Is rural India really open defecation free ?
- Global Growth Slow Down
- Nobel Prize in Economics 2019
- Regional Comprehensive Economic Partnership
- SBI wrote off bad loans worth 76,000 crores
- Surge in Onion Price
- Agriculture Credit by RBI’s Internal Working Group
- What is Debt to GDP Ratio?
- Yes Bank Crisis
- Nobel prize in Literature – Controversy
- Boosting Indian Exports
- Sopore Fruit Mandi deserted
- What is Pink Collarisation?
- Mizoram to have Broad Gauge railway line by 2021
- Demand downturn in Indian Economy
- Payment facilitation fund
- Participatory Guarantee Scheme
- RBI’s 4th Bi-monthly Monetary Policy 2019-20
- Tourism restrictions lifted in Kashmir
- Link between Jobs, Farming, and Climate
- Draft Social Security Code 2019
- State Tax Revenues, SGST and Central Tax Devolution are likely to fall short
- Competitiveness Index 2019 by World Economic Forum
- NITI Aayog’s Water Resources Strategy
- BSNL and MTNL financial issues-DoT prepares Rs 74000 crore revival plan
- 20th Livestock Census
- India falls 10 ranks in World economic forum’s Global competitiveness index
- RBI stops Printing Rs 2000 Notes
- What is the Unified Approach proposal of OECD?
- FCI granaries overflowing
- India’s Economic Growth 2019
- Financial Sector Scams in India
- Labour Market of India
- New Strategic Disinvestment Process
- Payment Delays to Sugarcane Farmers
- Why India’s IMF Quota is not increased
- What is monetary policy Transmission? Why banks are not reducing interest
- Mahatma Gandhi’s theory of Economics
- India moves up 14 spots to 63 on world Bank ease of doing business index
- New amendments to the Motor Vehicles Act
- Power Sector Scenario in India
- Telecos to Pay Rs 96,642 crore to the Government
- Camel population declines in Rajasthan
- Merger of BSNL and MTNL
- World bank on Indian economy
Defence & Security
- Nagas Kukis Conflict, What is the cause of the latest tensions?
- Case against 50 Celebrities controversy
- Can Indian Government intercept WhatsApp?
- UP Government fires 25000 home guards, Is Yogi Government’s decision justified?
- NCRB’s Crime in India 2017 report
- Aadhaar Social Media mandatory linking case
- What is TechSagar? National repository of India’s cyber tech capabilities.
Science & Technology
- ISRO’S Project NETRA
- Facebook’s LIBRA Currency in trouble
- WHO launches first World report on Vision
- 2019 Nobel prize in physics
- 2019 Nobel prize in Physiology and Medicine
- Elon musk’s starlink project
- NASA’s ICON mission
- New King of the Moons in the Solar system is Saturn
- What Is Spectroscopy ?
- Quantum supremacy
- Climate Vulnerable Mapping Of India
- C40 Cities
- Gujarat Unveils emission trading scheme
- Forest Plus 2.0
- Himalayan States seeks Green Bonus
- India to Phase Out Single Use Plastic (SUP) by 2022
- Role of Volcanoes in Global Warming
- NH 766 ban controversy, Protests in Kerala against night traffic ban on the forest stretch
- Climate Change needs Global Solution
- Aarey Forest -2185 trees to be cut for Mumbai metro
- Government to build 1400 km long Green wall
- Graded Response Action Plan in Delhi
- Aerosol formation brightening clouds
- Anthrax outbreak in Pobitora Wildlife Sanctuary, Two affected buffaloes died
- Species in News from June to October 2019
- Climate Action Summit 2019
Tag:GS-3||Economy|| External Sector|| International Tax Issues
What is the issue?
- The Organisation of Economic Co-operation and Development (OECD) has released a consultation paper proposing changes in the rules for taxing Internet giants such as Facebook, Apple, Google, Netflix,
- The proposal is called the “Unified Approach” and it will shift the standard of taxation from physical presence to sales in a particular market.
What is OECD?
- The Organisation for Economic Co-operation and Development (OECD) is an international economic organization.
- Foundation: It was founded in 1961by 18 European nations, and the United States and Canada to stimulate economic progress and world trade.
- It now has 36 membercountries that are mostly high-income, free-market economies. India is not a member of the OECD.
- Their goal is to shape policiesthat foster prosperity, equality, opportunity, and well-being for all.
Why there is a need for new taxation laws?
- Global Battle: The current international battle over how to regulate the digital economy also needs to be resolved.
- “Highly digitalized businesses” are now able to operate remotely and have high profits.
- Most businesses have moved their income to low-tax countries like Ireland.
- The proposal would give countries with many users of such business models new taxing rights.
- India is one of the countries on which a significant economic presence model is based.
- If the new OECD proposal is accepted, companies in the markets in which they sell more will have to pay more taxes.
How the new rule will be designed?
- The key to the proposal is the sales-based “new nexus.”
- “Nexus” in global taxation-refers to the existence of a corporation in a country that makes it taxable.
- The new nexus principle will address this issue by enforcing it in all situations where a corporation has a major business jurisdictional position in the economy regardless of its physical presence in that jurisdiction.
- The proposal proposes the design of a new rule and the determination of significant jurisdictional involvement by setting a market revenue threshold.
- It considers a 750-million-Eurorevenue threshold.
- This would allow the rule to encompass those who enter the market through a distributor.
- It also means that the ruleswould apply not only to large multinational tech companies but to any company with an online presence.
- The proposal focuses on large consumer-facing businesses, broadly defined as businesses that,
- Provide revenue from the supply of consumer products or
- Provide digital services with an element of the consumer’s face.
- This definition will be further articulated, but its recommendation exempts companies such as oil companies from resource extraction.
- The biggest problem is the arbitrary separation between what OECD calls “routine” and “residual” profits, and the proposal that only residual profits will be subject to unitary taxation.
- This has no economic justification since profits are anyway net of various costs and interest.
- Another concern is about the formula to be used to distribute taxable profits. The OECD suggests only sales revenues as the criterion, but developing countries would lose out from this because they are often the producers of commodities that are consumed in the advanced economies.
- The proposal leaves unanswered many questions-in particular, how much profit the country should receive.
- Finally, the option of this sum must arise from a political agreement that must be appropriate to all members of the inclusive system, small and large, existing and new.
- Stakeholders can submit their responses by November 12, 2019.
- Authorities expect to agree on a new tax system by the end of 2020.
- In the near future, the finance ministers of the G20 would discuss this plan, and countries in favour of new laws could then start negotiations.
Way forward for India
- It is important for the Indian government to look at this issue seriously and take a clear position at the OECD meeting because the outcome will be very important for its own ability to raise tax revenues.
- A government that is currently ineffective in battling both economic slowdown and declining tax revenues cannot afford to neglect this crucial opportunity. But more public pressure may be required to make the government respond.
Mains model question
- OECD has proposed that profits of MNCs should be available for taxation in the country where their customers are, irrespective of any physical presence in that market. Discuss