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Last Updated : Jul 06, 2020 02:47 PM IST | Source: Moneycontrol.com

Foreign digital companies may miss July 7 deadline for Google tax: Report

The government has ordered non-resident technology companies to pay a 2 percent equalisation levy on their transactions and services with effect from April 1, 2020.

Representative Image: Tax assessment
Representative Image: Tax assessment

Foreign digital companies may miss the July 7 deadline to pay the first instalment of equalisation levy, or Google tax, since the government has not yet provided a clarification.

Companies such as Netflix, Amazon, and Uber are awaiting clarity on details such as forex conversion rates to be used for payment and obtaining permanent account number (PAN), according to a Business Standard report.

Also read: A case to do away with equalisation levy

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There is also no clarity of the amount that determines applicability of the equalisation levy, the report said.

Moneycontrol could not independently verify the report.

The government has ordered non-resident digital companies such as Amazon, Netflix and Uber to pay a 2 percent equalisation levy on their transactions and services with effect from April 1, 2020.

"In the absence of detailed FAQs on the equalisation levy, non-resident digital companies are facing confounding issues such as forex conversion rates to be used for payment, determination of value of consideration for applicability of equalisation levy etc," Sandeep Jhunjhunwala, Partner, Nangia Andersen LLP told Business Standard.

First introduced in 2016, equalisation levy applied only to revenue from online advertisements, but was amended in February 2020 to include transactions made by non-resident ecommerce companies.

Other companies who will now have to pay equalisation levy include Adobe, Uber, Udemy, Zoom.us, Expedia, Alibaba, Ikea, LinkedIn, Spotify, and eBay.
First Published on Jul 6, 2020 02:47 pm
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