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The Global Minimum Tax Deal

  • Published
    14th Oct, 2021

GS-III: Economy

  • Growth & Development, Taxation
Context

Global Minimum Tax Rate, a global deal to ensure big companies pay a minimum tax rate of 15 per cent and make it harder for them to avoid taxation has been agreed by 136 countries recently (including India).

Prelims question:

With reference to ‘Global Minimum Tax Rate’, consider the following statements:

  1. It will be the minimum tax rate below which a country’s government cannot set their local corporate tax rate.
  2. It will end the global corporate tax race to the bottom.
  3. A global minimum tax deal has been recently struck between G20 countries.

Which of the above statement(s) is/are correct?

  • A.
  • B.
  • C.
  • D.

Mains Question:

Examine how a ‘Global Minimum Corporate Tax’ (GMCT) will ensure that the new-age multinational companies pay their fair share of taxes. Also, discuss the impact of a GMCT on India. (250 Words)

Approach:

  • Introduce by giving a definition of Global minimum tax.
  • Enumerate the benefits that GMCT is expected to have
  • List the impacts of GMCT on India
  • Way Forward and Conclusion

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