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India has been one of the fore-runners in adopting many BEPS action plans and the digital taxation was no exception. In year 2016, India introduced 6% equalisation levy ( let us consider this as version 1.0) on digital specified services received by a non-resident not having a Permanent Establishment (PE) in India.
In year 2020, India has introduced a version 2.0 of the equalisation levy, which extends the scope of such levy to non-resident e-commerce operators providing an e-commerce supply or a service [companies that are not covered by the Equalisation levy 1.0 and whose turnover is more than INR 20 million (USD 260,000)].
Further, amendment was brought in the year 2021 with Union Budget 2021 (with retrospective effect) where the applicability of levy and the definition of e-commerce supply have been further clarified/ expanded, giving it an avatar of Equalisation levy 2.1.
We at TransPrice help non-residents doing business with Indian business houses or customers in analyzing & testing their business models for applicability of Equalisation Levy (Digital Tax) and if applicable, post application quarterly and annual compliances and if not applicable, documenting the same.
Do you need assistance with your transfer pricing issues, or would you like to know more about us? Please click here.
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