On January 5, 2026, the OECD/G20 Inclusive Framework published an 88-page Side-by-Side Package modifying key aspects of BEPS 2.0. Pillar One reallocates taxing rights over large multinational profits to market jurisdictions; Pillar Two establishes a 15% global minimum corporate tax rate. The package refines technical rules, safe harbours, and transition mechanisms. India, as an Inclusive Framework member, is directly affected in how it taxes digital multinationals and designs its domestic minimum top-up tax.

BEPS stands for Base Erosion and Profit Shifting — the practice by which multinational corporations reduce their tax liability by shifting profits to low-tax jurisdictions. The OECD/G20 launched the BEPS project in 2013, and its evolved form, BEPS 2.0, has two structural pillars.

Pillar One addresses where profits are taxed. It reallocates a portion of residual profits of very large multinationals (global turnover above €20 billion, profitability above 10%) to the market jurisdictions where their goods or services are consumed — even without a physical presence. This is especially significant for digital economy firms like Google or Amazon that earn revenue in India without a permanent establishment.

Pillar Two addresses how much tax is paid. It introduces a global minimum effective corporate tax rate of 15% through the GloBE (Global Anti-Base Erosion) rules. Countries may impose a Qualified Domestic Minimum Top-up Tax (QDMTT) to collect the 'top-up' tax themselves before another country can. India has been considering implementing QDMTT to retain revenue that would otherwise go to a parent company's home jurisdiction.

The January 2026 Side-by-Side Package is significant because it modifies transition rules and safe harbours, affecting how companies compute their effective tax rates. For India, BEPS 2.0 directly intersects with its Equalisation Levy (digital services tax) and the future of the bilateral tax treaty network. India is a member of the Inclusive Framework, which now has over 140 countries.