The historic pact inked by G7, a group of the world's richest nations, to back a minimum global corporation tax rate of at least 15 per cent will benefit India as the effective domestic tax rate is above the threshold, and the country would continue to attract investment, as per tax experts.
The Group of Seven on Saturday reached a landmark deal to close cross-border tax loopholes used by some of the world's biggest companies. The Finance Ministers of G7 countries, which comprise of US, UK, Germany, Canada, France, Italy and Japan, said they would back a minimum global tax rate of 15 per cent for multinational companies.
Besides, they agreed to put in place measures to ensure taxes are paid in the countries where businesses operate, a move aimed at plugging loopholes in cross-border taxation.
Consulting firm AKM Global Tax Partner Amit Maheshwari said the pact is expected to benefit India as it is a big market for a large number of tech companies.
"It remains to be seen how the allocation would be between market countries. Also, the global minimum tax of at least 15 per cent means that in all probability the concessional Indian tax regime would still work, and India would continue to attract investment," Maheshwari