Budget 2018 – Alignment of Domestic Law with BEPS Action Plans

In this article, the author examines the recent changes announced in India’s 2018 Budget to extend the scope of the business connection test in the Income Tax Act to bring it into line with the expanded definition of a permanent establishment in the OECD’s Multilateral Instrument. The article also discusses the introduction of the significant economic presence test, which aims to tax new business models in the digital space.