Write the summary of following paragraph Multinational Anti Avoidance Rule Australia implemented this tax avoidance rule where if certain company structures are essentially only made for tax evasion then they cannot benefit the tax treaty. This is the Australian equivalent of the UK’s diverted profits tax (DPT) and whilst the mechanics are very different, the Australian version shares the ‘carrot and stick’ approach of the DPT. The Australian approach is to add a new provision to Part IVA, Australia’s general anti-avoidance rule (GAAR). By this form of amendment, there is no doubt Australia can override its existing double tax treaty commitments, at least at law, if not politically’. The new provision (section 177DA) targets global groups that avoid an Australian taxable presence by undertaking significant activities in Australia with a direct connection to Australian sales, but where the sales revenue is booked overseas; and do so with a principal purpose of avoiding tax in Australia, or avoiding Australian tax and reducing a foreign tax liability. The new section 177DA will apply where:• There is a BEPS scheme a) a foreign entity makes a supply to an Australian customer of the foreign entityb) activities are undertaken in Australia directly in connection with the supplyc) some or all of those Australian activities are undertaken by an Australian entity or Australian permanent establishment (PE), either of which are associatedwith or commercially dependent upon the foreign entityd) the foreign entity derives income from the supplye) some or all of that income isnot attributable to an Australian PE of the foreign entity. • The principal purpose test is satisfied• The foreign entity is a significant global entityThese measures will apply only to taxpayer groups with global revenues exceeding $1bn. 3. Equalization Levy The Indian government on February 29, 2016 introduced an equalization levy on online advertising revenue by non-resident e-commerce companies earned in India, which became effective on June 1, 2016. An equalization levy of 6% of the amount of consideration for specified services received or receivable by a nonresident not having a permanent establishment (PE) in India, from a resident in India who carries out business or profession, or from a nonresident having a PE in India. Specified service is defined as follows:a) Online advertisementb) Any provision for digital advertising space or any facility/service for the purpose of online advertisementc) Any other service which may be notified later by the central governmentThe equalization levy is aimed at taxing business-to-business (B2B) e- commerce transactions. Therefore, the scope of the levy may be expanded to cover a wider range of digital goods and services as time progresses. The levy would not be applicable to nonresident service providers having a PE in India, as they will be subject to regular PE-basis taxation. The levy is currently applicable only on B2B transactions, if the aggregate value of consideration in a year exceeds approximately US$1,500.To avoid double taxation of income which has been subject to an equalization levy, such income will be exempt in the hands of the nonresident under the Income Tax Act, 1961. However, one would need to evaluate the possibility of claiming a tax credit for such levy in the home country of the nonresident service provider. This is the first significant step taken by India to tax digital economy transactions. Refer to above approaches, Equalization levy is the prominent approach to be implemented in Indonesia to tax multinational internet-based companies who derive revenue from Indonesia and do not have permanent establishment in Indonesia. Equalization levy has similar approach with the witholding tax in Indonesia. There are several approaches that must be done to implement equalization levy:• Due to complexity, there should be cooperation in terms of providing and sharing information among government institution in Indonesia that consists of the Ministry of finance, Ministry of Communication & Information, Ministry of Trade and Bank of Indonesia so that there is transparency as it has been described in the KUP article 35 that is when in the implementation of the provisions of the tax laws and regulations required information or evidence of banks, public accountants, notaries, tax consultants, administrative offices, and / or other third parties, who have a taxpayer relationship with tax audits, tax collection, or investigation of criminal acts in the field of taxation, upon written request from the tax director- the party is obliged to provide information or evidence received but this should not only relate to when the examination or error occurred so that the investigation due to criminal action . Income tax law no 36/2008 of article 26 to amend minimum income earned amounting to USD 1,500 and subject to a tariff of 20% based on tariffs on Income Tax article 26 j

Question

Write the summary of following paragraph Multinational Anti Avoidance Rule Australia implemented this tax avoidance rule where if certain company structures are essentially only made for tax evasion then they cannot benefit the tax treaty. This is the Australian equivalent of the UK’s diverted profits tax (DPT) and whilst the mechanics are very different, the Australian version shares the ‘carrot and stick’ approach of the DPT. The Australian approach is to add a new provision to Part IVA, Australia’s general anti-avoidance rule (GAAR). By this form of amendment, there is no doubt Australia can override its existing double tax treaty commitments, at least at law, if not politically’. The new provision (section 177DA) targets global groups that avoid an Australian taxable presence by undertaking significant activities in Australia with a direct connection to Australian sales, but where the sales revenue is booked overseas; and do so with a principal purpose of avoiding tax in Australia, or avoiding Australian tax and reducing a foreign tax liability. The new section 177DA will apply where:• There is a BEPS scheme a) a foreign entity makes a supply to an Australian customer of the foreign entityb) activities are undertaken in Australia directly in connection with the supplyc) some or all of those Australian activities are undertaken by an Australian entity or Australian permanent establishment (PE), either of which are associatedwith or commercially dependent upon the foreign entityd) the foreign entity derives income from the supplye) some or all of that income isnot attributable to an Australian PE of the foreign entity. • The principal purpose test is satisfied• The foreign entity is a significant global entityThese measures will apply only to taxpayer groups with global revenues exceeding $1bn. 3. Equalization Levy The Indian government on February 29, 2016 introduced an equalization levy on online advertising revenue by non-resident e-commerce companies earned in India, which became effective on June 1, 2016. An equalization levy of 6% of the amount of consideration for specified services received or receivable by a nonresident not having a permanent establishment (PE) in India, from a resident in India who carries out business or profession, or from a nonresident having a PE in India. Specified service is defined as follows:a) Online advertisementb) Any provision for digital advertising space or any facility/service for the purpose of online advertisementc) Any other service which may be notified later by the central governmentThe equalization levy is aimed at taxing business-to-business (B2B) e- commerce transactions. Therefore, the scope of the levy may be expanded to cover a wider range of digital goods and services as time progresses. The levy would not be applicable to nonresident service providers having a PE in India, as they will be subject to regular PE-basis taxation. The levy is currently applicable only on B2B transactions, if the aggregate value of consideration in a year exceeds approximately US$1,500.To avoid double taxation of income which has been subject to an equalization levy, such income will be exempt in the hands of the nonresident under the Income Tax Act, 1961. However, one would need to evaluate the possibility of claiming a tax credit for such levy in the home country of the nonresident service provider. This is the first significant step taken by India to tax digital economy transactions. Refer to above approaches, Equalization levy is the prominent approach to be implemented in Indonesia to tax multinational internet-based companies who derive revenue from Indonesia and do not have permanent establishment in Indonesia. Equalization levy has similar approach with the witholding tax in Indonesia. There are several approaches that must be done to implement equalization levy:• Due to complexity, there should be cooperation in terms of providing and sharing information among government institution in Indonesia that consists of the Ministry of finance, Ministry of  Communication & Information, Ministry of Trade and Bank of Indonesia so that there is transparency as it has been described in the KUP article 35 that is when in the implementation of the provisions of the tax laws and regulations required information or evidence of banks, public accountants, notaries, tax consultants, administrative offices, and / or other third parties, who have a taxpayer relationship with tax audits, tax collection, or investigation of criminal acts in the field of taxation, upon written request from the tax director- the party is obliged to provide information or evidence received but this should not only relate to when the examination or error occurred so that the investigation due to criminal action . Income tax law no 36/2008 of article 26 to amend minimum income earned amounting to USD 1,500 and subject to a tariff of 20% based on tariffs on Income Tax article 26 j

Accepted Answer

Government: It refers to the group of people that take care of the country. The government is…