Page 247 - Kaleidoscope Academic Conference Proceedings 2024

FUTURE STANDARDS AND REGULATIONS OF INTERNATIONAL TAXATION FOR
SUSTAINABLE ICT SOLUTIONS

2
1
Shradha Pandey ; Vagish Pandey ;
1 Senior Associate, specializing in taxation laws, Lakshmikumaran and Sridharan attorneys, India
2 Patent Law Associate, specializing in Technology laws, Singh and Singh associates, India

ABSTRACT
It is crucial to remember that the avenues and opportunities
The Information and Communications Technology (ICT) brought about by the digital technologies remain elusive for
Solutions utilized by the people operate on a world-wide a third of humanity, especially the rural communities of India
scale because they are purely information services and developing countries around the globe. Approximately
intertwined with the hardware established in a particular 2.6 billion people are still offline and though connectivity is
jurisdiction. The Taxation laws around the globe are based progressing globally, the pace of that progress is uneven,
on concepts of a local geography, such as controlling leaving many people in low-income countries behind.
premises and physical equipment or employing staff in the
jurisdiction. Several Information Communication Technology (ICT)
companies, predominantly the ones dealing with the cloud
The concept of Taxation of ICT companies is particularly service providers operate on a global scale because they are
complex and uncertain and as of yet, there is no consensus purely information services intertwined with the hardware
at the international level on this topic. This paper delves into established in a particular jurisdiction. The Taxation laws in
the standards and necessary regulatory pre-requisites to India as well as the entire world, are majorly based on
further the innovation and proper regulation of the ICT concepts of a particular local geography, such as controlling
companies, predominantly the ones based on cloud premises and physical equipment or employing staff in the
computing. The detailed independent discussion on indirect jurisdiction. Thus, the concept of Taxation of ICT companies
taxes provided in this paper highlights the necessity and is particularly complex and uncertain and as of yet, there is
mechanism for standardization of the indirect tax regime in no consensus at the international level on this topic. This
respect of the ICT solutions for the future. paper delves into the standards and necessary regulatory pre-
requisites to further the innovation and proper regulation of
Furthermore, the paper advocates for the dichotomy of the ICT companies, predominantly the ones based on cloud
implementing the standard of reverse charge mechanism computing. Understanding the existing regulations and
(RCM) as well as the Forward Charge Mechanisms (FCM) keeping pace with the international regulations regarding the
basis of taxation and availment of Input Tax Credit (ITC). taxation of ICT solutions becomes crucial for exponential
The paper also proposes the principle of standardization in growth of the industry.
the form of collection of the tax and subsequent disbursement
by the intermediaries across the globe. 2. SCOPE FOR FUTURE RESEARCH AND
LIMITATIONS OF THE CURRENT PAPER
Keywords – ICT Solution, Standards, Indirect Tax.
This reflection paper currently only draws reference from the
1. INTRODUCTION Organisation for Economic Cooperation and Development
(OECD) as well as the United Nations (UN) white papers to
The year 2023 marked a significant milestone in respect of assess and understand the regulations for standards across
the Sustainable Development Goals for the United Nations the globe. It is noted that subsequent empirical study needs
as well as the whole world, as it was the midpoint in the to be carried out to validate standard of levy under the
pursuit of the 2030 Agenda. On, 17 September 2023, in New reverse charge mechanism (RCM) proposed for the
York, the eve of the Sustainable Development Goals Summit, collection and disbursement of the revenue to the
the digital technologies came to the forefront, as they governments.
depicted how game-changing digital solutions can accelerate
progress in each of the 17 SDGs and can positively impact
progress on over 71% of the Sustainable Development
Goals.[1]

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