Master Class on Digital Economy Developments – Equalisation Levy, SEP & Other Issues
- Year of Publication: 2020
- ISBN: 0
Course Duration:
180 minutes (two episodes of 90 minutes each)
Module Background:
Addressing the tax challenges of the digital economy has been one of the critical aspects of the OECD’s work on BEPS and hence it probably assumes a place of pride as Action Plan 1. To provide a quick recap, to tackle the broader direct tax issues raised by digitalization, Action Plan 1 recommended three options, namely (i) a new nexus rule in the form of Significant Economic Presence [SEP] test, (ii) a withholding tax which could be applied to certain types of digital transactions and, (iii) an Equalisation Levy. Though none of these options received global consensus, it was concluded that countries could introduce any of these options in their domestic tax laws as additional safeguards against BEPS, provided they respect existing treaty obligations in their bilateral tax treaties.
While it is seen that most countries worldwide adopted only one of the above alternatives, however, India went on to adopt all three approaches, as evidenced by being the first country to implement an equalization levy @ 6% [whose scope was recently enlarged to cover a wide gamut of transactions undertaken by e-commerce players], to introducing the concept of “Significant Economic Presence” vide Finance Act, 2018 [which was earlier proposed to be effective from AY 2021-22, but has now been deferred to 2022-23], followed by bringing in a new TDS on e-commerce payments by insertion of Sec. 194-O vide Finance Act 2020.
What will the module cover?
In this two part Master Class module, International Tax Stalwart Mr. Padamchand Khincha has discussed the developments of digital economy in the light of BEPS Action Plan 1. Particularly focusing on India’s “three pronged approach” and the critical interplay amongst the said elements, he has dwelt upon the practical impact of the recently expanded equalization levy scope, the ramifications of the newly introduced Sec. 194-O and whether the current “PE” definition needs a relook. Mr. Khincha has also shared his take on the tax treaty nuances involved in the said matters, while also highlighting the tax ramifications of the same for businesses & individuals globally.
H. Padamchand Khincha is a partner in H C Khincha & Co and H C Khincha & Associates, Bangalore. With over 30 years of experience in corporate and international tax regime, he has spearheaded the income- tax consultancy and litigation practice. He advises multinational companies, Indian companies as well as high networth individuals on various tax matters including tax structuring, due diligence, transfer pricing and compliance aspects. He has represented large corporates in some of the high- profile cases before various Income- tax tribunals across India and has been associated with several landmark decisions too.
Padamchand Khincha is a prolific writer on various topics in income- tax. He has authored the book ‘Emerging Issues in International Taxation’. He has co- authored “Permanent Establishment – Emerging trends”, “Decoding section 5”, “Tax Holiday U/s.10A and 10B - An analysis”; “Tax Treaties of India - A compilation”; “Capital gains of Non- residents”; “Tax deduction at source”; “Concept of Indexation under capital gains”.
He has contributed to various articles and papers published by The Chamber of Tax Consultants, ITRAF, BCAS. He has authored and co- authored articles across various tax magazines including the Taxmann publication, Bombay Chartered Accountants Journal, ITR etc. He has delivered more than 500 lectures across the nation on several income- tax issues.
He has been actively engaged in several initiatives undertaken by the Institute of Chartered Accountants of India (ICAI). He was appointed the group leader for preparing the approach paper on the Guidance Note on Transfer Pricing. He was instrumental in making a critical analysis of the Direct Tax code as a member of the team constituted by ICAI on the request on CBDT. He was a member of Committee of ICAI involved in preparing the technical background paper on Income Computation and Disclosure Standards. He deposed as an expert before (a) high powered committee on E. commerce constituted by the Central Board of Direct Taxes in India; (b) Rangachary Committee set up to “Review Taxation of Development Centres and the IT Sector; and (c) by the A P Shah Committee constituted by the Government of India to examine the matters relating to MAT on FII/ FPI(s). He was a country reporter for India for IFA Rio de Janeiro Congress 2017 on ‘Assessing BEPS - Origin, Standards, Responses’. He is on the editorial board constituted for International Tax Journal published by the Chamber of Tax Consultants.
His teaching stints in the past include guest lectures at IIM, Bangalore; intensive coaching classes of ICAI; faculty at the Direct Taxes Training Institute of the Income Tax Department. Padamchand Khincha is a Commerce graduate from the University of Bangalore securing 5th Rank at the University level. He holds a Bachelor’s degree in Law.
He qualified as a Chartered Accountant in 1982 by securing the 25th rank.
Taxsutra is considered the most credible source of tax news in the tax fraternity. What started as a fledgling start-up has now become a leading brand in the tax world not only in India, but across the globe. Taxsutra's diverse customer set includes Fortune 500 Companies, large Indian Business Groups, Global Conglomerates, Tax Judges, IRS Officers, CBDT, Tax Lawyers & thousands of tax practitioners.
Taxsutra suite of portals :
1. Real time tax news & analysis for Corporate Tax (www.taxsutra.com/dt)
2. Transfer Pricing Portal (www.taxsutra.com/tp)
3. GST and Central Indirect Taxes Portals (www.taxsutra.com/gst - www.idt.taxsutra.com)
4. "Taxsutra Database" - Powerful Online Direct Tax Reference and Search Tool (www.database.taxsutra.com)
5. LawStreetIndia (LSI) (www.lawstreetindia.com) contains sub-modules on Company law, Securities law (SEBI/SAT), FEMA, IP laws & Competition Law
6. Taxsutra Accounting Standards portal (Ind-AS) (www.greentick.taxsutra.com)
Similar Books
Ratings and Reviews
Overall Rating
- Year of Publication: 2020
- ISBN: 0
Course Duration:
180 minutes (two episodes of 90 minutes each)
Module Background:
Addressing the tax challenges of the digital economy has been one of the critical aspects of the OECD’s work on BEPS and hence it probably assumes a place of pride as Action Plan 1. To provide a quick recap, to tackle the broader direct tax issues raised by digitalization, Action Plan 1 recommended three options, namely (i) a new nexus rule in the form of Significant Economic Presence [SEP] test, (ii) a withholding tax which could be applied to certain types of digital transactions and, (iii) an Equalisation Levy. Though none of these options received global consensus, it was concluded that countries could introduce any of these options in their domestic tax laws as additional safeguards against BEPS, provided they respect existing treaty obligations in their bilateral tax treaties.
While it is seen that most countries worldwide adopted only one of the above alternatives, however, India went on to adopt all three approaches, as evidenced by being the first country to implement an equalization levy @ 6% [whose scope was recently enlarged to cover a wide gamut of transactions undertaken by e-commerce players], to introducing the concept of “Significant Economic Presence” vide Finance Act, 2018 [which was earlier proposed to be effective from AY 2021-22, but has now been deferred to 2022-23], followed by bringing in a new TDS on e-commerce payments by insertion of Sec. 194-O vide Finance Act 2020.
What will the module cover?
In this two part Master Class module, International Tax Stalwart Mr. Padamchand Khincha has discussed the developments of digital economy in the light of BEPS Action Plan 1. Particularly focusing on India’s “three pronged approach” and the critical interplay amongst the said elements, he has dwelt upon the practical impact of the recently expanded equalization levy scope, the ramifications of the newly introduced Sec. 194-O and whether the current “PE” definition needs a relook. Mr. Khincha has also shared his take on the tax treaty nuances involved in the said matters, while also highlighting the tax ramifications of the same for businesses & individuals globally.
H. Padamchand Khincha is a partner in H C Khincha & Co and H C Khincha & Associates, Bangalore. With over 30 years of experience in corporate and international tax regime, he has spearheaded the income- tax consultancy and litigation practice. He advises multinational companies, Indian companies as well as high networth individuals on various tax matters including tax structuring, due diligence, transfer pricing and compliance aspects. He has represented large corporates in some of the high- profile cases before various Income- tax tribunals across India and has been associated with several landmark decisions too.
Padamchand Khincha is a prolific writer on various topics in income- tax. He has authored the book ‘Emerging Issues in International Taxation’. He has co- authored “Permanent Establishment – Emerging trends”, “Decoding section 5”, “Tax Holiday U/s.10A and 10B - An analysis”; “Tax Treaties of India - A compilation”; “Capital gains of Non- residents”; “Tax deduction at source”; “Concept of Indexation under capital gains”.
He has contributed to various articles and papers published by The Chamber of Tax Consultants, ITRAF, BCAS. He has authored and co- authored articles across various tax magazines including the Taxmann publication, Bombay Chartered Accountants Journal, ITR etc. He has delivered more than 500 lectures across the nation on several income- tax issues.
He has been actively engaged in several initiatives undertaken by the Institute of Chartered Accountants of India (ICAI). He was appointed the group leader for preparing the approach paper on the Guidance Note on Transfer Pricing. He was instrumental in making a critical analysis of the Direct Tax code as a member of the team constituted by ICAI on the request on CBDT. He was a member of Committee of ICAI involved in preparing the technical background paper on Income Computation and Disclosure Standards. He deposed as an expert before (a) high powered committee on E. commerce constituted by the Central Board of Direct Taxes in India; (b) Rangachary Committee set up to “Review Taxation of Development Centres and the IT Sector; and (c) by the A P Shah Committee constituted by the Government of India to examine the matters relating to MAT on FII/ FPI(s). He was a country reporter for India for IFA Rio de Janeiro Congress 2017 on ‘Assessing BEPS - Origin, Standards, Responses’. He is on the editorial board constituted for International Tax Journal published by the Chamber of Tax Consultants.
His teaching stints in the past include guest lectures at IIM, Bangalore; intensive coaching classes of ICAI; faculty at the Direct Taxes Training Institute of the Income Tax Department. Padamchand Khincha is a Commerce graduate from the University of Bangalore securing 5th Rank at the University level. He holds a Bachelor’s degree in Law.
He qualified as a Chartered Accountant in 1982 by securing the 25th rank.
Taxsutra is considered the most credible source of tax news in the tax fraternity. What started as a fledgling start-up has now become a leading brand in the tax world not only in India, but across the globe. Taxsutra's diverse customer set includes Fortune 500 Companies, large Indian Business Groups, Global Conglomerates, Tax Judges, IRS Officers, CBDT, Tax Lawyers & thousands of tax practitioners.
Taxsutra suite of portals :
1. Real time tax news & analysis for Corporate Tax (www.taxsutra.com/dt)
2. Transfer Pricing Portal (www.taxsutra.com/tp)
3. GST and Central Indirect Taxes Portals (www.taxsutra.com/gst - www.idt.taxsutra.com)
4. "Taxsutra Database" - Powerful Online Direct Tax Reference and Search Tool (www.database.taxsutra.com)
5. LawStreetIndia (LSI) (www.lawstreetindia.com) contains sub-modules on Company law, Securities law (SEBI/SAT), FEMA, IP laws & Competition Law
6. Taxsutra Accounting Standards portal (Ind-AS) (www.greentick.taxsutra.com)
