India and the Organisation for Economic Co-operation and Development (OECD) have decided to enhance their cooperation in dealing with issues relating to transfer pricing and promote better tax compliance and measures to improve the prevention and regulation of cross border disputes.
The agreement for increased cooperation in this regard was reached during the course of the two-day (June 13-14) international seminar on ‘Adopting tax system and international tax rules to the new global environment: A shared challenge for India and the OECD' at a time when the Indian government is under tremendous pressure to go after the tax evaders and nab those who have stashed black money in offshore accounts. “Both [India and the OECD] agreed for enhanced tax cooperation and suggest measures which will provide greater certainty to both taxpayers and the governments,” the Finance Ministry said in a statement here on Wednesday.
The OECD, the statement said, appreciated the action taken by India in handling the twin issues of tax evasion and black money. In particular, the government has adopted a five-pronged strategy to tackle the illicit fund and this includes joining the global crusade against black money and creation of an appropriate legislative framework.
According to OECD Secretary-General Angel Gurría, the phenomenal economic advances India has made in recent years and its growing integration into the global economy have exposed its tax policies to the same challenges facing the industrialised countries, notably how to adapt its domestic tax system and its international tax policies to a borderless economy, and how to ensure that the approaches embraced today will be well-suited to meet tomorrow's needs.
During the seminar, participants explored some of the most complex challenges posed by the taxation of multi-national enterprises in a global economy. India and OECD also announced plans to strengthen ongoing co-operation on tax-related issues through development of a three-year partnership that will provide greater opportunities for structured dialogue and sharing of information.
