India To End 6% Online Ad Levy on Foreign Tech Giants – What Does It Mean?

The Indian government plans to remove the 6% equalisation levy on online ads provided by foreign tech giants like Google, Meta, and Amazon.

This tax has been in place since 2016 on payments exceeding Rs 1 lakh per year to non-resident service providers for digital ads.

The move is part of 35 amendments to the Finance Bill, 2025, and will take effect from April 1, 2025.

Last year, India had already scrapped a 2% digital services tax on e-commerce transactions after it caused trade tensions with the US. However, the 6% levy remained.

The US had objected to digital services taxes, launching an investigation in June 2020. It argued that such taxes unfairly targeted American tech firms like Apple, Amazon, Google, and Meta.

The US also claimed that similar taxes in Austria, Italy, Spain, Turkey, and the UK violated international taxation principles and placed an unfair burden on US companies.