New Delhi, Oct 7 (IANS) In the fight against black money stashed abroad, the government on Wednesday approved India’s signing of two protocols with Israel and Vietnam to make changes to the Double Taxation Avoidance Treaty (DTAT).
“A decision was taken to sign two protocols with Israel and Vietnam to amend the DTAT,” Power Minister Piyush Goyal told reporters here after a cabinet meeting.
“This is in continuation of our fight to curb the menace of black money and bring back the money taken out by misuse of means,” Goyal added.
The decision comes ahead of President Pranab Mukherjee’s three-nation visit to Israel, Jordan and Palestine, the first to the three countries by an Indian head of state.
The aim of the DTAT is to avoid double taxation of income. The treaty can be bilateral or multi-lateral.
An official statement said the treaty party countries, in these cases India, Israel and Vietnam, “agreed to update Article 27 on the ‘Exchange of Information’ in DTAC (Double Taxation Avoidance Convention) to meet internationally accepted standards”.
“The information received from Israel and Vietnam in respect of a resident of India can be shared with other law enforcement agencies with authorisation of the competent authority and vice versa,” the cabinet communique said.
The confidentiality, or secrecy, clause in the DTAT forbids sharing of details obtained through such treaties with other law enforcement and investigation agencies.
India has DTAT with over 95 countries and plans to sign more with others. The major countries with which it has signed the DTAT are the US, Britain, the UAE, Canada, Australia, Saudi Arabia, Singapore, Switzerland, New Zealand and Mauritius.
In this connection, the total worth of declaration of assets made under the black money compliance window that ended on September 30 is Rs.4,417 crore by 638 declarants, the government announced on Monday.
Revenue Secretary Hasmukh Adhia said the tax department is now more actively pursuing penalties and prosecutions with better access to information allowed by treaties like
FATCA with the US and the taxation agreements India has with 96 countries.
“Our request for (tax) information from other countries has doubled over the last fiscal. 1,600 requests went out in 2014-15, as compared to 800 the year before,” Adhia said.
At the G20 nations Australia summit last November, leaders endorsed a new global transparency standard by which more than 90 jurisdictions would begin automatic exchange of tax information, using a common reporting standard by 2017-18.
The deal will not only allow the countries to extract bank details for future, but they could also avail account balance information of the past five to six years upon request.