Liechtenstein, one of India’s important partner nations in fighting overseas tax abuse and black money, will shed its secrecy cloak this week and join hands with a host of other countries for automatic exchange of information and mutual assistance in tax matters.
The Paris-based Organisation for Economic Cooperation and Development (OECD) — an international policy-advisory body that formulates global tax standards to fight tax evasion and concealment of illicit funds — has said the country will sign the convention during the Global Forum on Transparency and Exchange of Information for Tax Purposes which will be held on November 21-22, in Jakarta, Indonesia.
The step comes as a major boost for India in its fight against tax evasion and stashing of illegal funds abroad as a number of individuals have been found to have been using Liechtenstein’s banking channels to hide their illegal incomes.
The announcement by the land-locked nation in Central Europe virtually pulls down the wall of secrecy and will allow partner nations like India to seek information about suspect individuals and entities, and provide for obtaining banking information about such people.
Switzerland, last month, had joined the same convention.
OECD’s multilateral convention provides for all forms of mutual assistance like exchange on request, spontaneous exchange, tax examinations abroad, simultaneous tax examinations, and assistance in tax collection while protecting taxpayers’ rights.
It also provides the option to undertake automatic exchange, requiring an agreement between the parties interested in adopting this form of assistance.
The 60 other signatories under the convention — besides India — include Argentina, Australia, Austria, Belgium, Canada, China, Denmark, France, Germany, Greece, Hungary, Indonesia, Italy, Japan, Korea, the Netherlands, New Zealand, Poland, Russian Federation, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, the UK and the US.