Panama papers fallout: Tax department issues guidelines on information requests
The note advices taxmen on what information to seek from BVI such as details of beneficial ownership
New Delhi: Anticipating a surge in information exchange requests to British Virgin Islands (BVI) relating to investigations of the Panama papers, the income tax department has issued detailed guidelines to taxmen on how to place such information requests.
The Indian government is currently investigating the names that were divulged as part of Panama papers. It has sent out written notices to all Indian residents mentioned in the Panama papers and in certain cases followed it up with a detailed questionnaire. In many such cases, investments by Indian residents have been found to be routed through the British Virgin Islands.
“Over the past few years, India has sent several EOI (exchange of information) requests to BVI under the India-BVI Tax Information Exchange Agreement. A lot of requests are likely to be made to the BVI in near future in view of the investigations being carried out in the Panama Papers. Even though the EOI Cell of India has been making continuous efforts to improve the efficiency and efficacy of the information exchange process with BVI, a large number of deficiencies are being observed in the EOI requests sent by field officers," the direction to the taxmen by the Central Board of Direct Taxes said.
The note advices taxmen on what all information to seek from BVI such as details of beneficial ownership as well as the process to be followed like specifically listing out the information required and refrain from making vague requests that may seem like a fishing expedition.
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