Quick Summary
India is preparing to align with the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) by adopting Pillar 2, which mandates a global minimum corporate tax rate of 15% for multinational corporations (MNCs). According to official sources, the government is set to include enabling provisions for this regime in the Income Tax Act, 1961, as part of an ongoing comprehensive review. The review aims to simplify the tax code and remove redundant sections, with the changes expected t
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FAQ :
India is proposing to implement a global minimum corporate tax rate of 15% for multinational corporations.
India is aligning with the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) by adopting Pillar 2.
The rule will apply to multinational corporations (MNCs) with a global turnover exceeding 750 million euros.
The changes are expected to be introduced in the FY26 Budget.
The primary goal of Pillar 2 is to prevent MNCs from shifting profits to low-tax jurisdictions by ensuring a minimum Effective Tax Rate (ETR) of 15%.
India will be able to collect 'top-up tax' from MNCs that underreport profits in low-tax jurisdictions through mechanisms like the Qualified Domestic Minimum Top-up Tax (QDMTT) and Income Inclusion Rule (IIR).
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