Your browser is currently blocking notification.
Please follow this instruction to subscribe:
Notifications are already enabled.

Google, Facebook’s Local Arms To Submit Financial Data By December 31

Google, Facebook’s Local Arms To Submit Financial Data By December 31

The move will ensure that the companies do not evade taxes

The directive came in when both India and US have been discussing on how to share the details

The directive is not applicable for countries not part of the OECD project

The central government has reportedly directed US-based technology companies with Indian subsidiaries such as Google, Facebook, Dell and others to submit their financial details including global revenue, profit and sales to the taxman by December 31.

According to reports, the information will have to be submitted to the tax authorities in line with the multilateral Organisation for Economic Cooperation and Development (OECD). The move has been made to ensure that the companies pay the required taxes to the government.

The sudden request by the central government has put the companies in a pinch due to the short notice. The directive also came in at a time when the government is still in talks with the US government, discussing how the information will be shared.

In line with the ruling, the companies will have to submit a Country-by-Country (CbC) Report where they will have to state their annual financial details for all tax jurisdiction where they do business.

This is not the first time that US-based tech companies have had run-ins in tax-related matters with the Indian tax authorities. In November this year, it was reported that tax authorities may ask Google India to pay tax on $2.18 Bn (INR 16,119.6 Cr) of revenue it earned from India over the past five years, which it has remitted to its subsidiaries in Ireland and Singapore.

Prior to that, in October 2017, the Income Tax Appellate Tribunal (ITAT) Bengaluru dismissed Google India’s all arguments and ordered it to pay tax over $231 Mn (INR 1457 Cr) transacted to its Google Ireland office without paying any tax to the Indian Income Tax department.

The move came at a time when the Indian government has been taking a tough stand on data localisation. The Indian authorities and the US tech companies have been in a debate since the reports of Facebook-Cambridge Analytica issue leading to the data breach of 5.62 Lakh Indian citizens surfaced in April 2018.

In July end, a high-level panel headed by Justice B N Srikrishna submitted its recommendations and the draft Personal Data Protection Bill 2018 to IT minister Ravi Shankar Prasad.

[This development was reported by ET]