India will work with like-minded countries to ensure that developing countries like it get a fair share of the proposed tax on multinational digital companies as part of a global deal being crafted, a a senior government official told ET.

“We would talk to like-minded countries… We should get a better deal,” the official said.

India on Friday joined 130 countries in the inclusive G20-OECD framework to reform international tax rules to create a new global tax regime on which there is broad agreement, but details remain to be defined.

The framework for the proposed tax – which would apply to multinational companies with global sales of over € 20 billion and profitability above 10% – and its implementation should be worked out by the Organization for Cooperation and Development. economic development (OECD) by October.

The final negotiated multilateral instrument will be developed and opened for signature in 2022 for implementation from 2023.

India will have to withdraw the equalization tax, or the Google tax, introduced in 2016 when the global tax deal is implemented.

New Delhi wants to ensure that its tax revenues from the new regime are greater than what it gets from the equalization tax.

India provides a high user base to several global e-commerce platforms and wants to ensure that it receives a fair share of the revenue, and that the agreed formula is balanced and has broader coverage than currently considered.

India has supported the OECD Base Erosion Profit Shift talks where this deal has been being rejected since its inception and is keen on this deal.

Experts said New Delhi will now have to focus on the formula. “It is likely that India will look into the finer details regarding the distribution of profits and taxing rights vis-à-vis the tax lost from the Equalization levy and share its point of view. when the formulas are discussed and agreed upon, “said Vikas Vasal, national managing partner – taxation, at Grant Thornton Bharat LLP.

The proposed framework rests on two pillars. Pillar 1 aims to ensure a more equitable distribution of profits and taxing rights between countries with regard to the largest multinational companies, including digital companies.

Pillar 2 aims to limit competition in corporate tax matters by introducing a minimum overall corporate tax rate.

According to the proposal, the profits of large multinational companies exceeding 10% of the revenues will be allocated to the linked market jurisdictions using an income-based allocation. The exact share of the profits to be reallocated has not been finalized and negotiations on this matter should accelerate in the coming weeks.

Extractive and regulated financial services have been granted a waiver of this proposal.