India to sign agreement for data on tax evasion soon

India to sign agreement for data on tax evasion soon

India will soon put its signature on an agreement for exchange of information to curb tax evasion after refusing to sign the multilateral pact along with 51 nations in Berlin last month. 

Finance Ministry officials told Deccan Herald that the government was currently in the process of completing the internal procedures required for it to sign the agreement.

With the Supreme Court closely monitoring the government’s move to track black money stashed by Indians in foreign accounts, New Delhi last month did not sign the agreement as its confidentiality clause restricts the use of data received from another country.

New Delhi is studying the “Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information”, which 51 other nations signed at the end of the Global Forum on Transparency and Exchange of Information on October 29.

Though India attended the Global Forum meeting held under the auspices of the Organisation for Economic Cooperation and Development (OECD), it refrained from signing the agreement, which put in place modalities for exchange of information among nations to deal with tax evaders. India’s decision not to join the first set of signatory nations raised doubts about its commitment to the Automatic Exchange of Information (AEOI) on Financial Account, proposed by the OECD and endorsed by the G-20.

But government officials say that in the upcoming G-20 summit in Australia, Prime Minister Narendra Modi would assert India’s commitment to implementing the AEOI from September 2017—a pledge it made along with about 40 other “early adopter” nations last month.

The agreement is the first step towards implementing the OECD-developed AEOI standard. An official in New Delhi, however, pointed out that some other early adopters of the AEOI standard, too, did not sign the agreement last month. Like India, they will sign it later, after completing internal procedures. New Delhi is carefully studying the agreement’s Section 5, which says all information exchanged would be subject to the “confidentiality rules and other safeguards” provided for in the Convention on Mutual Administrative Assistance in Tax Matters.