Outsourcing tax may alter cost structure of US cos, reshape Indian IT firms, GCCs

DAYS after US Republican Senator Bernie Moreno introduced Halting International Relocation of Employment (HIRE) Act, IT industry experts say proposed Bill will alter cost structure for the US companies and reshape Indian IT firms and Global Capability Centres (GCCs).

- ENS ECONOMIC BUREAU @ Chennai

The Bill aims to impose a 25% tax on US companies that outsource jobs in tech and other sectors. Jaspreet Singh, partner and chief revenue officer, Grant Thornton Bharat, said the proposed HIRE Act, with its 25% outsourcing tax and denial of tax deductions on such payments, would alter cost structure for US firms outsourcing to Indian IT firms and GCCs.