• The Tax Terminal

Big Tech: Tax Implications


India's new IT rules made it mandatory for tech giants to have a grievance officer, prompting others to seek legal advice on the tax implications of the government's new IT order. To clear the air, the Indian government defined that a Nodal officer is an auxiliary post and appointments are made to respond to the government/regulators. Such appointments do not imply a permanent establishment or a business connection, and tax implications arise only when a foreign firm's local office conducts business. Furthermore, revenue generated by the local office for the parent office would result in tax liabilities. The international taxation rules, particularly with regard to permanent establishments, have been a critical area for multinationals because the rules typically call for taxing profits in countries where they create value.