Skip to main content

India signs international tax treaty

Date : January 30, 2012

In yet another move to get information about black money stashed away abroad, India has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, a multilateral agreement that promotes international cooperation while respecting the rights of taxpayers.

This will send a strong signal that India and the other 31 signatory countries have joined hands to ensure that individuals and multinational enterprises pay the right amount of tax, at the right time and in the right place. The Convention provides for administrative cooperation among the parties in the assessment and collection of taxes, with a view to combating tax avoidance and evasion, according to a statement by the Organisation for Economic Cooperation and Development (OECD) here.

With taxpayers increasingly operating on a global basis, tax authorities are moving from bilateral to multilateral cooperation and from exchange of information on request to other forms of cooperation. The convention is an effective and practical tool to help tax authorities in their everyday work. “India has moved very quickly since its commitment to the Convention at the November 2011 G20 ceremony in Cannes and I expect it will be the first non-OECD G20 country for which the updated Convention is in force,” said Jeffrey Owens, Director of the OECD Centre for Tax Policy and Administration.

Signatories to the amended Convention are: Argentina, Australia, Belgium, Brazil, Canada, Denmark, Finland, France, Georgia, Germany, Iceland, India, Indonesia, Ireland, Italy, Japan, Korea, Mexico, Moldova, the Netherlands, Norway, Poland, Portugal, Russia, Slovenia, South Africa, Spain, Sweden, Turkey, Ukraine, the United Kingdom, and the United States.

The Convention was signed by Sanjay Kumar Mishra, Joint Secretary, Foreign Tax and Tax Research Division, Department of Revenue, in the presence of Deputy Secretary-General of OECD Rintaro Tamaki. This instrument hitherto available for members of the OECD and the Council of Europe was amended in 2010 and made open for all countries in June 2011.

Wider network
The Convention was amended to respond to the 2009 G20 Summit call for developing a broader multilateral approach to improve the effectiveness of exchange of information, cooperation among the countries in the assessment and collection of taxes, with a view to combating tax avoidance and evasion. Many more countries are expected to sign the Convention. This provides for a wider network of countries cooperating in exchange of information, assistance in tax collection.

The convention is based on international standard of transparency and exchange of information. This instrument is multilateral and a single legal basis for multi-country cooperation as against the DTAAs/TIEAs which are bilateral. It provides for an extensive network and there will be consistent application of provisions, leaving limited scope for deviation. It provides extensive forms of cooperation among the signatories on all taxes. It not only facilitates the exchange of information, but also provides for assistance in the recovery of taxes. This will give a fillip to the efforts of the government to bring back Indian money illegally stashed away abroad.

Tax examinations
The convention provides for simultaneous tax examinations and participation in tax examinations in other countries. It provides for examination of tax affairs of the taxpayers simultaneously in their own territory and share the relevant information with each other. This allows tax officials to enter into the territory of the other country to interview individuals and examine records. It also provides for automatic exchange of information, spontaneous exchange of information and exchange of past information in criminal tax matters.

The information received under the convention can also be used for other purposes besides those related to tax cooperation, such as countering money laundering, with the approval of the supplying state.
The convention is an effective tool to help tax authorities in their everyday workIt is based on  international standard of transparency and exchange of information
Labels:

Comments

Post a Comment

Popular posts from this blog

The legacy of Srinivasa Ramanujan

His work has had a fundamental role in the development of 20th century mathematics and his final writings are serving as an inspiration for the mathematics of this century On a height he stood that looked towards greater heights. Our early approaches to the Infinite Are sunrise splendours on a marvellous verge While lingers yet unseen the glorious sun. What now we see is a shadow of what must come. Sri Aurobindo, Savitri, 1.4 The story of Srinivasa Ramanujan is a 20th century “rags to mathematical riches” story. In his short life, Ramanujan had a wealth of ideas that have transformed and reshaped 20th century mathematics. These ideas continue to shape mathematics of the 21st century. This article seeks to give a panoramic view of his essential contributions. Born on December 22, 1887 in the town of Erode in Tamil Nadu, Ramanujan was largely self-taught and emerged from extreme poverty to become one of the most influential mathematicians of the 20th c...
Post a Comment
Read more

Landmarks in the Constitutional Development of India

Regulating Act, 1773 It was the first attempt by the British Parliament to regulate the affairs of the East India Company Governor of Bengal became Governor General for all British territories in India Governor General had a Council of 4 members to assist him in administration Bombay and Madras Presidencies were subordinated to Bengal Presidency Supreme Court was set up at Calcutta having jurisdiction over British subjects Amending Act, 1781 Jurisdiction of the Supreme Court was defined Governor-General-in-Council was made the final court of appeal from provincial court. Pitt's India Act, 1784 East India Company's Court of Directors (consisting of 24 members) was left with the responsibilities of only commercial affairs of the company Board of Control consisting of 6 Parliamentary Commissioners was constituted to control civil, military and revenue affairs of East India Company in India. Court of Directors had to comply with the orders and directio...
Post a Comment
Read more

India's stake in Arctic cold war

Will it be the next geopolitical battleground or remain the common heritage of humankind? A retired Rear Admiral of the Chinese PLA Navy, Yin Zhuo, caused a major stir in March 2010, when in a speech to the Chinese Peoples' Political Consultative Conference, he declared: “The Arctic belongs to all the people around the world as no nation has sovereignty over it.” China, he said, must also have a share of the region's resources. Resources, reserves The five nations which ring the Arctic Ocean, namely the U.S. Canada, Denmark, Norway and Russia, disagree, though they themselves have competing territorial claims. The stakes are enormous: The Arctic Circle encloses 21 million square kilometres of land and 13 million sq.km of mostly ice-bound seas. By way of comparison, India's total land area is 3.3 million sq.km. It is estimated that the region may hold over 40 per cent of the current global reserves of oil and gas. There may also be significant reserves of co...
Post a Comment
Read more