India working towards a global digital tax

The country has introduced an enabling provision that will make an overseas platform that advertises, streams or sells goods to an Indian IP address taxable. Thus, Indian government will now be able to garner revenue from ecommerce firms (such as Amazon, Alibaba and Ebay), streaming service providers (like Netflix) and those engaged in targeted advertisements (such as Facebook and Google). “The idea is to have an enabling framework in place so that once the OECD framework is ready, we can go ahead,” a senior government official stated. The Finance Bill has proposed changes to the income tax Act to add new source rules that consider certain types of a foreign assessee’s income to be of Indian origin and hence taxable in the country.