Future Standards and Regulations of International Taxation for Sustainable ICT Solutions

The Information and Communications Technology (ICT) Solutions utilized by the people operate on a world-wide scale because they are purely information services intertwined with the hardware established in a particular jurisdiction. The Taxation laws around the globe are based on concepts of a local geography, such as controlling premises and physical equipment or employing staff in the jurisdiction.The concept of Taxation of ICT companies is particularly complex and uncertain and as of yet, there is no consensus at the international level on this topic. This paper delves into the standards and necessary regulatory pre-requisites to further the innovation and proper regulation of the ICT companies, predominantly the ones based on cloud computing. The detailed independent discussion on indirect taxes provided in this paper highlights the necessity and mechanism for standardization of the indirect tax regime in respect of the ICT solutions for the future.Furthermore, the paper advocates for the dichotomy of implementing the standard of reverse charge mechanism (RCM) as well as the Forward Charge Mechanisms (FCM) basis of taxation and availment of Input Tax Credit (ITC). The paper also proposes the principle of standardization in the form of collection of the tax and subsequent disbursement by the intermediaries across the globe.