India Cites Domestic Reasons For Not Signing Global Tax Information Pact

India Cites Domestic Reasons For Not Signing Global Tax Information Pact

Finance Minister Arun Jaitely has written to his German counterpart expressing India’s support for the new global protocol for automatic exchange of information on tax evaders but cited domestic procedural requirements as the reason for not signing it now. On Wednesday In New Delhi, which spearhead the fight on information exchange on tax evaders and bank accounts, skipped signing the agreement.

A government official privy to the development said, Jaitely has conveyed to the German finance minister that India supported the global initiative wholeheartedly but was unable to sign it at this point in time. The Berlin meeting where the multilateral competent authority agreement and intended first information exchange date was to be signed could not be attended by Indian officials as New Delhi was not prepared to give an international commitment on confidentiality of information, a key requirement of the pact, as it awaits clarity from the apex court.

With confidentiality clauses the government has sought clarity from the court on signing international agreements. As many as 51 countries have signed the Organization of Economic Cooperation and Development (OECD) agreement to share financial data and boost efforts to crack down on tax evasion. The signatories to the agreement include most European Union nations as well as tax heavens such as Liechtenstein, the British Virgin Island and Cayman Island. The OECD said they will begin automatically exchanging data collected by financial institutions as early as 2017. India has also committed to start information sharing from September 2017.

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