Gaps in tax reform

Details of new global agreement will need to be scrutinised

A long process of negotiations, initiated by the Organization for Economic Cooperation and Development (OECD) and the G-20 grouping of large economies, has come to an end with agreement on the taxation of multinationals. The impetus for this agreement is, in particular, the digitisation of the global economy, which makes it harder to pin down a tax base; the long process to end base erosion and profit shifting (BEPS) has come to this conclusion. About 130 countries, including India, have agreed in principle. This global tax agreement has two pillars. The first is that a proportion of the “supernormal” profits