India: Determined thresholds for “significant economic presence” tax base definition
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Description
Determined thresholds for “significant economic presence” tax base definition
On 3 May 2021, the Indian Ministry of Finance issued a notification detailing the thresholds to identify companies having a “significant economic presence” (SEP) in India. The notification prescribes that companies with a revenue of over INR 20 million ($267'000) for sales to Indian persons or over 300'000 Indian users have a "significant economic position" (SEP). Therefore the revenue which can be attributed to these transactions or activities in India is taxable. The thresholds will be effective from 1 April 2022.
Original sourceScope
Policy Area
Taxation
Policy Instrument
Direct taxes including Digital Service Taxes
Regulated Economic Activity
cross-cutting
Implementation Level
national
Government Branch
legislature
Government Body
parliament
Complete timeline of this policy change
Hide details
2018-02-01
under deliberation
2018-03-14
adopted
2018-03-29
in grace period
2021-05-03
adopted
Key regulatory dimensions
Regulated subjects
The businesses, government agencies or individuals affected by this policy or regulatory change.
producer / supplier
1
Type
Private organisation
Economic activity
cross-cutting
Category
All
Policy change by business practice
The detailed activities within the scope of this policy or regulatory change.
all goods (physical or digital): sale
Regulatory tool
Subordination under other existing tax
Sanctions
TBR - Existing statutory sanction
Regulated subjects
1
service (any type): sale
Regulatory tool
Subordination under other existing tax
Sanctions
TBR - Existing statutory sanction
Regulated subjects
1