×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Govt to examine tax pacts with 87 nations

Govt to examine tax pacts with 87 nations
Comment E-mail Print Share
First Published: Fri, Jun 17 2011. 11 02 PM IST
Updated: Fri, Jun 17 2011. 11 02 PM IST
Hyderabad: Indian government on Friday said that it needs to renegotiate or take up afresh its tax agreements with 87 countries to facilitate information exchange on tax defaulters.
“Out of 87 agreements that we need to renegotiate, we have finalised 50 agreements in one and half years time,” said Sunil Mitra, union finance secretary.
“They require approvals in cabinet, some of them require certain legislation to be put in place by either of the countries,” he added.
India has double taxation avoidance agreements with 79 countries. The double taxation avoidance means citizens of both the countries who entered into an agreement should not get taxed in both the countries when they do business.
“Despite having a provision that allows sharing of information on tax for tax purposes, there is also a confidentiality provision that doesn” allow to use information for anything other than for tax purposes,” said Sunil Mitra.
These provisions hinder us from establishing the criminality of the tax evaders.
“Which is why when we got information on the Liechtenstein bank account holders, we were not able to put them in public domain. The double taxation agreement with Germany did not allow us do so. If we make public that information, it becomes violation of treaty commitment,” added.
“We have identified 65 of these agreements that need to be amended so that we have clear access to information; also there are 22 no tax jurisdication with whom we need to do tax information exchange agreements.
The union finance minister has raised the issue with Organisation for Economic Cooperation and Development (OECD) secretary general to address the problem of illicit fund flow.
The Global Financial Integrity has estimated that over the last 10 years at least $20 billion illegal money flows out of India every year.
The government said was also able to detect Rs 34,000 crore worth illicit money.
“Almost 70% of the illicit inflows are happening because trade miss-pricing, basically under invoicing. We have been able to detect Rs 34,000 crores worth of mis pricing in what we call transfer pricing methodology relating to international overseas transactions in last one and half years,” said Sunil Mitra.
The government is planning to open eight more CBDT offices in eight countries.
Comment E-mail Print Share
First Published: Fri, Jun 17 2011. 11 02 PM IST