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Equalisation Levy (Google Tax) in India

Follower ✭ ☆ ☆
# 1
Follower ✭ ☆ ☆

Hello,

 

Recently Indian Government has launched Equalisation levy (Google Tax) for all which states as any person or entity that makes a payment exceeding Rs 1 lakh in a financial year to a non-resident technology company will now need to withhold 6% tax on the gross amount being paid as an equalisation levy. The said rule is applicable when the payment is made to companies that don't have a permanent establishment in India.

 

So if we are running AdWords Campaign for our client and Google gives Invoice as Google India so do we have to pay 6% tax for our clients or as Company is Registered in India then we don't need to pay any taxes. Can anyone guide us about how this tax is going to be implemented.

 

 

1 Expert replyverified_user

Re: Equalisation Levy (Google Tax) in India

Top Contributor
# 2
Top Contributor
Hello,

The most recent information is available here in the help center document:- https://support.google.com/adwords/answer/2375370?hl=en

But for more tax related updates, even the help center doc says that you should consult your tax adviser.

I would also suggest you in case you have a dedicated Google rep, you can contact him/her as well for more specific details.

Pankaj

Re: Equalisation Levy (Google Tax) in India

[ Edited ]
Visitor ✭ ✭ ✭
# 3
Visitor ✭ ✭ ✭

If a foreign company like Google has a permanent establishment in India (like Google India) then no payment of online advertisement services to Google India this 6% levy would not attract. Though before taking any final decision, all the facts would need to be analysed in detail.

Further, to understand how this Equalisation Levy could impact you or your clients, you can contact us at <edited by a Community Manager as noted below> or <edited by a Community Manager as noted below>


Regards,
CA. Deepak G

 

Note: please be aware that it is counter to Community Guidelines to offer assistance outside the forum itself, and/or to provide your contact information in a forum post. 

 

Before posting further, please read our Community Guidelines, which may also be viewed via the Community Guidelines link towards the bottom right of most pages in this Community. Thank you for your understanding. 

Re: Equalisation Levy (Google Tax) in India

Visitor ✭ ✭ ✭
# 4
Visitor ✭ ✭ ✭
I have recently received this email (given below) from Google. This clearly state that Equalisation Levy is applicable and we have to bear it. For my account Invoices are raised by Google India Private Limited.

--

Hello,

This is to inform you that as per the Notification No. 37/ 2016: F.No. 370142/12/2016-TPL dated 27 May 2016 read with Finance Act, 2016, Government of India has levied an ‘Equalisation Levy’ on provision of online advertisement services or any other service or facility for the purpose of online advertisement by a Foreign Company provided on or after June 1, 2016 to specified customers in India. The applicable rate of the levy is 6% of value of fees for providing online advertisement or related services.

As you are aware, the terms and conditions applicable to AdWords require customers to bear any tax or Government charges on the services availed of by them.

Accordingly, with respect to invoices raised by Google for online advertisement and service for the purpose of online advertisement provided on or after 1 June 2016, you will need to deposit 6% Equalisation Levy (as applicable).

The Google Payments Team