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GOOGLE, the Internet mammoth don’t pay taxes in India!!

Budget 2016 introduced the concept of equalisation levy. It is levied on digital advertising service. The provisions of equalisation levy are somewhat similar to that of withholding tax(TDS). To get an insight into the concept of equalisation levy, i am presenting a series of write ups on this topic…

First, a quick question to you….

Which is the biggest company in the internet world? Google, Linkedin, Twitter, Facebook ???

Google …….

And which is the biggest internet company in India?

Google…..

Yes…., It has CEO Sundar Pichai…. Proud of India…. Child of India, Indian prodigy...

But, let me tell you a fact….. I bet most of you must not be knowing..

Google DOESN’T pay TAXES in INDIA!!!!

On google ad revenues….

Yes…. when a simple citizen earning more than Rs2,50,000 an annum has to pay taxes, then why the giant google doesn’t pay???

No… No…. google is not a tax evader…

It employes choicest of the brains in the world, not only for its development, but for saving taxes too…

Those brains told google to sell all of its ads (google ads….) through US… in such a way that no permanent establishment exists in India and so no taxability… in India.

In accordance with clause 5 of double taxation avoidance agreement (shortly called as DTAA) between Republic of India (Shortly India) and United States of America (Shortly called as USA):

“An income of non-resident of India shall be taxable in India if such non-resident has its permanent establishment (PE) in India..”

Provision of digital advertising space can be made available through internet by any part of the world...So intentionally these Google, Facebook, LinkedIn, Twitter, etc. never set up P.E in India, just to avoid from payment of taxes….

Also, do you know what, Google earned whooping Rs 5904 crore in F/Y16….Atleast 25% of this revenue would have come from sale of space for digital advertising, this 25% being the most pessimistic assumption….Had this equalisation levy got implemented before, tax authorities would have earned approx 88 crores of rupees, alone from google itself(5904*25%*6%)...As famous hindi idiom goes, “Jab jaege tabhi savera”

In the light of this, what Indian tax authorities did is, they have levied a tax on the fees that Indian advertisers pay rather than putting a tax directly on digital advertising platforms. This is termed as equalisation levy.

Ohhh, equalisation levy is not always attracted…..Also, its only on B2B transactions….For elaborate view, read this article.

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First, a quick question to you….&nbsp;Which is the biggest company in the internet world? Google, Linkedin, Twitter, Facebook ???&nbsp;Google …….&nbsp;And which is the biggest internet company in India?&nbsp;Google…..&nbsp;Yes…., It has CEO Sundar Pichai…. Proud of India…. Child of India, Indian prodigy...&nbsp;But, let me tell you a fact….. I bet most of you must not be knowing..&nbsp;Google DOESN’T pay TAXES in INDIA!!!!On google ad revenues….&nbsp;Yes…. when a simple citizen earning more than Rs2,50,000 an annum has to pay taxes, then why the giant google doesn’t pay???&nbsp;No… No…. google is not a tax evader…&nbsp;It employes choicest of the brains in the world, not only for its development, but for saving taxes too…&nbsp;Those brains told google to sell all of its ads (google ads….) through US… in such a way that no permanent establishment exists in India and so no taxability… in India.&nbsp;In accordance with clause 5 of double taxation avoidance agreement (shortly called as DTAA) between Republic of India (Shortly India) and United States of America (Shortly called as USA):&nbsp;“An income of non-resident of India shall be taxable in India if such non-resident has its permanent establishment (PE) in India..”&nbsp;Provision of digital advertising space can be made available through internet by any part of the world...So intentionally these Google, Facebook, LinkedIn, Twitter, etc. never set up P.E in India, just to avoid from payment of taxes….&nbsp;Also, do you know what, Google earned whooping Rs 5904 crore in F/Y16….Atleast 25% of this revenue would have come from sale of space for digital advertising, this 25% being the most pessimistic assumption….Had this equalisation levy got implemented before, tax authorities would have earned approx 88 crores of rupees, alone from google itself(5904*25%*6%)...As famous hindi idiom goes, “Jab jaege tabhi savera”&nbsp;In the light of this, what Indian tax authorities did is, they have levied a tax on the fees that Indian advertisers pay rather than putting a tax directly on digital advertising platforms. This is termed as equalisation levy.&nbsp;&nbsp;Ohhh, equalisation levy is not always attracted…..Also, its only on B2B transactions….For elaborate view, read this article.

First, a quick question to you…. Which is the biggest company in the internet world? Google, Linkedin, Twitter, Facebook ??? Google ……. And which is the biggest internet company in India? Google….. Yes…., It has CEO Sundar Pichai…. Proud of India…. Child of India, Indian prodigy... But, let me tell you a fact….. I bet most of you must not be knowing.. Google DOESN’T pay TAXES in INDIA!!!!On google ad revenues…. Yes…. when a simple citizen earning more than Rs2,50,000 an annum has to pay taxes, then why the giant google doesn’t pay??? No… No…. google is not a tax evader… It employes choicest of the brains in the world, not only for its development, but for saving taxes too… Those brains told google to sell all of its ads (google ads….) through US… in such a way that no permanent establishment exists in India and so no taxability… in India. In accordance with clause 5 of double taxation avoidance agreement (shortly called as DTAA) between Republic of India (Shortly India) and United States of America (Shortly called as USA): “An income of non-resident of India shall be taxable in India if such non-resident has its permanent establishment (PE) in India..” Provision of digital advertising space can be made available through internet by any part of the world...So intentionally these Google, Facebook, LinkedIn, Twitter, etc. never set up P.E in India, just to avoid from payment of taxes…. Also, do you know what, Google earned whooping Rs 5904 crore in F/Y16….Atleast 25% of this revenue would have come from sale of space for digital advertising, this 25% being the most pessimistic assumption….Had this equalisation levy got implemented before, tax authorities would have earned approx 88 crores of rupees, alone from google itself(5904*25%*6%)...As famous hindi idiom goes, “Jab jaege tabhi savera” In the light of this, what Indian tax authorities did is, they have levied a tax on the fees that Indian advertisers pay rather than putting a tax directly on digital advertising platforms. This is termed as equalisation levy.  Ohhh, equalisation levy is not always attracted…..Also, its only on B2B transactions….For elaborate view, read this article.

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GOOGLE, the Internet mammoth don’t pay taxes in India!!