While the intention of the government may be to tax online companies, the levy could actually end up being a cost to small Indian businesses which advertise on these platforms. The Indian Government has announced its intention to charge a 6% equalisation levy on overseas companies such as Google and Facebook to ensure they pay for the revenue obtained from local advertisers. Advertising Standards Authority of India (ASAI) As multinational digital platforms are not permanently based in the country, which would make them liable to pay tax in India, and they cannot be double-taxed, the government has resorted to indirect methods of deriving some monetary compensation from these platforms’ profits. However, small Indian businesses and foreign start-ups may feel the greatest impact from this decision.
The Indian Government has announced its intention to charge a 6% equalisation levy on overseas companies such as Google and Facebook to ensure they pay for the revenue obtained from local advertisers. Advertising Standards Authority of India (ASAI) As multinational digital platforms are not permanently based in the country, which would make them liable to pay tax in India, and they cannot be double-taxed, the government has resorted to indirect methods of deriving some monetary compensation from these platforms’ profits. However, small Indian businesses and foreign start-ups may feel the greatest impact from this decision.