A total of 130 countries had agreed in July to an overhaul of global tax standards to ensure that multinationals pay taxes wherever they operate and at a minimum rate of 15%. The Ministry of Finance said at the time that some important issues, including the allocation of profits and the scope of tax rules, had not yet been resolved and that a “consensus agreement” was expected by October after have worked out the technical details of the proposal.
The proposed two-pillar solution consists of two elements: the first pillar, which concerns the reallocation of an additional share of profits to market jurisdictions, and the second pillar, which consists of a minimum tax and is subject to tax rules.
Speaking at ICRIER’s annual G20 international conference, Sitharaman said the two-pillar solution to the international tax issue will reach an advanced stage of implementation that India will have to lead.
“At this stage, we are very close to coming up with something in terms of the specifics of the two-pillar proposal. We have already had a conversation and agreed on a framework… We are in the final stages of finalizing the details. So I don’t think it’s time for me to spell out the details of what we agree on, but those are the things the conversation is going on,” Sitharaman said.
The finance ministers of the G-20 countries are due to meet on October 13 in Washington.