New Delhi, Jul 2 (IANS): India has joined the Organisation of Economic Co-operation and Development (OECD) and the G20 inclusive framework tax deal that is working towards addressing the tax challenges arising from the digitalisation of the economies globally.

Majority of the OECD and G20 members, including India, on Thursday adopted the Inclusive Framework on Base Erosion and Profit Shifting that contains a high-level statement outlining consensus solution to address tax challenges arising in a digitised economy.

The proposed solution consists of two components -- one, which is about reallocation of additional share of profit to the market jurisdictions, and two, consisting of minimum tax and subject to tax rules.

Some significant issues, including share of profit allocation and scope of subject to tax rules, remain open and need to be addressed, a Finance Ministry statement said.

Further, the technical details of the proposal will be worked out in the coming months and a consensus agreement is expected by October.

The principles underlying the solution vindicates India's stand for a greater share of profits for the markets, consideration of demand side factors in profit allocation, the need to seriously address the issue of cross border profit shifting and the need for subject to tax rule to stop treaty shopping.

India is in favour of a consensus solution which is simple to implement and comply. At the same time, the solution should result in the allocation of meaningful and sustainable revenue to market jurisdictions, particularly for developing and emerging economies.

India will continue to be constructively engaged for reaching a consensus based on a ready to implement solution with reallocation of additional share of profit to the market jurisdictions and minimum tax as a package by October and contribute positively for the advancement of the international tax agenda.