India has completed negotiations with as many as 16 of the identified 22 priority jurisdictions/countries for entering into a tax information exchange agreement (TIEA).
Out of these, TIEAs have already been signed by the Government with five countries/jurisdictions — Bahamas, Bermuda, British Virgin Islands, Cayman Islands and Isle of Man, Parliament was informed on Tuesday.
The 16 jurisdictions/countries with which negotiations have been completed are Argentina, Bermuda, Bahamas, British Virgin Islands, Cayman Islands, Congo, Costa Rica, Gibraltar, Guernsey, Isle of Man, Jersey, Liberia, Macau, Marshall Islands, Monaco and Saint Kitts & Nevis.
The concept of TIEA is a result of the work undertaken by the Paris-based Organisation for Economic Cooperation and Development to address harmful tax practices.
An objective of TIEA is to promote international cooperation in tax matters through exchange of information. The nature of tax-related information that could be shared under a TIEA varies from agreement to agreement.
India had last signed a TIEA in March this year with Cayman Islands. This was the fifth TIEA entered into by India.
The Central Government has framed a comprehensive five pronged strategy in order to obtain trail of money stashed in secret bank accounts in tax havens abroad.
The strategy comprises joining the global crusade against ‘black money' (for example our action in G-20, Global Forum on Transparency and Exchange of Information for tax purposes, Task Force on Financial Integrity and Economic Development, Financial Action Task Force, UN, OECD etc); creating an appropriate legislative framework (various anti-tax evasion measures legislated in the existing Act and proposed in the DTC, new DTAAs and TIEAs, amending existing DTAAs).
Also, the strategy includes setting up institutions for dealing with illicit funds (10 income tax overseas units, dedicated computerised exchange of information unit); developing systems for implementation (new manpower policy) and imparting skills to the manpower for effective action.
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