India has signed a multilateral agreement that would pave the way for effective exchange of financial account information on an automatic basis among countries.
This agreement is called the multilateral competent authority agreement (MCAA) on Automatic Exchange of Financial Account Information (AEOI).
It sets out the details of what financial account information would be automatically exchanged between countries and when.
The competent authority agreement implements the approved standard for automatic exchange. While the agreement is multilateral, the actual exchanges are bilateral.
The declaration to comply with the provisions of the MCAA was signed by Mohan Kumar, Ambassador of India to France in a signing ceremony held in Paris on June 3.
As many as six countries including India joined the MCAA on that day. The other five countries were Australia, Canada, Costa Rica, Indonesia and New Zealand.
With these six countries joining the MCAA on June 3, the total number of countries agreeing to exchange information automatically in accordance with MCAA has gone upto sixty.
So far, ninety-four countries have committed to exchange information on an automatic basis from 2017 onwards as per the new global standards on automatic exchange of information, known as Common Reporting Standards (CRS) on AEOI.
AEOI based on CRS, when fully implemented, would enable India to receive information from almost every country in the world including offshore financial centres and would be the key to prevent international tax evasion and avoidance, an official release said.
This would be instrumental in getting information about assets of Indians held abroad including through entities in which Indians are beneficial owners. This will help the Government to curb tax evasion and deal with the problem of black money, the release added.