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Updated: November 5, 2011 03:01 IST

India signs convention on global tax cooperation

Vaiju Naravane
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PTI

All G20 members have now become signatories

India on Friday signed the Convention on Mutual Administrative Assistance in Tax Matters, developed jointly by the Council of Europe and the Organisation for Economic Co-operation and Development (OECD), and opened for signature by the member-states of both organisations on January 25, 1988. All members of the G20 have now become signatories to the Convention. R. Gopalan, Secretary, Department of Economic Affairs, signed on behalf of the Indian government. The Convention will have to be ratified by the Indian Parliament to become law.

“Tax evasion and illicit flows are a serious problem and over the last two years, in order to check this trend, India has negotiated 19 new double taxation avoidance agreements and 17 new tax information exchange agreements,” Mr. Gopalan said.

The G20 Summit in April 2009 called for action “to make it easier for developing countries to secure the benefits of the new cooperative tax environment, including a multilateral approach for the exchange of information.” In response, the OECD and the Council of Europe developed a Protocol amending the multilateral Convention on Mutual Administrative Assistance in Tax Matters to bring it in line with the international standard on exchange of information for tax purposes and to open it to all countries.

Speaking at the G20 Summit, Prime Minister Manmohan Singh called on world leaders to address the problem of tax havens and illicit money outflows. “Tax evasion and illicit flows have seen the migration of tax bases in developing countries abroad and are serious problems,” the Prime Minister told the 6th G20 Summit here.

The Convention facilitates international co-operation for a better operation of national tax laws, while respecting the fundamental rights of taxpayers. The Convention provides for all possible forms of administrative co-operation between states in the assessment and collection of taxes, in particular with a view to combating tax avoidance and evasion. This co-operation ranges from exchange of information, including automatic exchanges, to the recovery of foreign tax claims.

The Multilateral Convention on Mutual Administrative Assistance in Tax Matters offers a wide range of tools for cross-border tax co-operation. It includes automatic exchange of information, multilateral simultaneous tax examinations and international assistance in the collection of tax due. At the same time, the Convention imposes safeguards to protect the confidentiality of the information exchanged.

“Today we have taken a major step forward to improve global tax cooperation,” said OECD Secretary-General Angel Gurría from the Cannes G20 Summit. “The OECD looks forward to continuing to work with the G20 and other countries to maximise the benefits from this powerful multilateral instrument. Tax co-operation and compliance are of crucial importance for all countries and citizens — and not only in times of a tight fiscal and budgetary environment.”

Keywords: global taxG20Cannes

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This commend worthy step should have been taken up before this slow down.

from:  vikram tiwari
Posted on: Nov 8, 2011 at 17:33 IST
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