Intersection of Pillar 2 and The Draft GloBE Rules with India’s Tax Treaties

Episode Duration:
95 minutes

Episode Background:
The Global Anti-Base Erosion Model Rules (GloBE Rules) were released by the OECD in December 2021 as part of Pillar Two of the solutions to address tax challenges arising from the digitization of the economy. The GloBE Rules seek to introduce a global minimum effective tax rate at an agreed minimum rate of 15%.  In March 2022, the OECD released the Commentary on the said rules which provides detailed guidance on application of the GloBE Rules.  The Globe Rules are slated to be effective from January 2023, which is less than 12 months away and its now become very important for the tax professionals to understand this complex piece of proposed taxation rules.

What shall the episode cover?
Against this backdrop, Taxsutra in association with Nishith Desai Associates is delighted to present to you an episode on “Intersection of Pillar 2 and The Draft GloBE Rules with India’s Tax Treaties”. In this episode, Mr. Meyyappan Nagappan (Partner, Trilegal), has covered the following –


(i) Mechanism of the Draft GloBE Rules – Interlocking rules to collect a top-up tax

• Analyzed the application of Income Inclusion Rules (IIR) and Under-taxed Payment Rules (UTPR) in the case of India through hypothetical case studies;
• Issues with the calculation of Effective Tax Rate (ETR) for the applicability of GloBE Rules;
• Possibility of low-income jurisdiction to apply GloBE Rules with lower monetary thresholds;
• Impact analysis on Indian businesses with a global focus and presence, particularly on investment hubs in India.

(ii) Implementation and Administrability challenges

(iii) Mechanism and Operability of Subject to Tax Rules (STTR) and its benefit to India