India, U.S. agree on transitional approach for digital tax on e-commerce supplies

In a major reform of the international tax system, 136 countries have agreed to an overhaul of global tax norms to ensure that multinationals pay taxes wherever they operate and at a minimum 15% rate

India and the United States have agreed for a transitional approach on equalisation levy or digital tax on e-commerce supplies beginning April 1, the Finance Ministry said on Wednesday.

In a major reform of the international tax system, on October 8 this year, 136 countries, including India, have agreed to an overhaul of global tax norms to ensure that multinationals pay taxes wherever they operate and at a minimum 15% rate.

However, the deal requires countries to remove all digital services tax and other similar unilateral measures and to commit not to introduce such measures in the future.