India is likely to benefit from the global minimum 15 percent corporate tax rate pact inked by the world's richest nations as the effective domestic tax rate is above the threshold, and the country would continue to attract investment, tax experts said on Sunday.

The Finance Ministers of G-7 countries, comprising US, UK, Germany, France, Canada, Italy and Japan, on Saturday reached a landmark deal on taxing multinational companies as per which the minimum global tax rate would be at least 15 percent. They also agreed to put in place measures to ensure businesses pay taxes in the countries where they operate, a move aimed at plugging loopholes in cross-border taxation.

Nangia Andersen India Chairman Rakesh Nangia said the G7 commitment to global minimum tax rate of 15 percent works well for the US government and most other countries in western Europe. However, some low-tax European jurisdictions such as the Netherlands, Ireland and Luxembourg and some in the Caribbean rely largely on tax rate arbitrage to attract MNCs. "The global pact would face the challenge of getting other major nations on the same page, since this impinges on the right of the sovereign to decide a nation's tax policy," Nangia added.

India had in September 2019 slashed corporate taxes for domestic companies to 22 percent and to 15 percent for new domestic manufacturing units. The concessional tax rate was extended to the existing domestic companies as well, subject to certain conditions.

Joe Biden offers to keep 2017 Trump tax cuts in infra, talks with Republicans

GST Board Exempts Import Duty on Black Fungus drug, Leaves Vaccine Tax Rate Unchanged

India trade deficit hits Eight-month low in May led by rise in exports