Draft tax law likely in Budget for minimum levy on MNES

India is preparing a draft legislation on the global minimum tax for multinational enterprises (MNEs) which could be proposed in the Union Budget, to be presented on July 23, and pave the way for changes to the country's tax laws, said two people with direct knowledge of the matter.

- SHRIMI CHOUDHARY

The global minimum tax, also known as the Pillar Two regime, aims to prevent MNEs from shifting their profits to low-tax nations by ensuring that they maintain an effective tax rate of 15 per cent across all jurisdictions where they operate.

This is in line with the multilateral convention framework agreed member far incorporated the changes in upon by the 140 countries of the Organisation for Economic Co-operatio and Development (OECD). India has been an OECD Key Partner since 2007, alongside Brazil, China, Indonesia and South Africa.