Impact of Digitalisation on Taxes & Base Erosion & Profit Shifting (BEPS) Special Index to India

Abstract

The digital growth of global businesses is forcing tax authorities to rethink how they control tax compliance by taxpayers and collect the appropriate taxes to follow. Many tax laws were enacted in the 20th century and may no longer apply in the 21st century digital world. This paper discusses the need for improved tax management and tax collection in dealing with digital business processes, the threat of erosion of Base Erosion and Profit Shifting (BEPS) and the need for faster digital tax administration. The paper also focuses on the role played by the Organization for Economic Co-operation and Development (OECD) and the progress in tax administration achieved by various countries especially in India. It is noteworthy that about 115 countries are forcibly advancing digital spending as a result of OECD's request for greater cooperation. India, although not a member of the OECD, has implemented a number of measures, particularly the two regional tax treaties and is actively pursuing digital integration to improve tax collection.