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All about global minimum tax, and what it means for India and the world

A large group of rich nations, which includes the US and UK, has reached a landmark deal to squeeze more money out of multinational companies such as Amazon and Google and reduce their incentive to shift profits to low-tax offshore havens. This essentially means hundreds of billions of dollars could flow into the coffers of governments left cash-strapped by the pandemic.

A primer on what it means for the world:

Global minimum tax, why is there a need now?

Current global tax rules date back to the 1920s and struggle with multinational tech giants that sell services remotely and attribute much of their profits to intellectual property held in low-tax jurisdictions.

Major economies are aiming to discourage multinationals from shifting profits. Income from intangible sources such as drug patents, software and royalties on intellectual property has migrated to these jurisdictions, allowing companies to avoid paying higher taxes in their home count ..

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