India has reiterated the need for global implementation of reciprocal information exchange under common reporting standards to tackle the menace of tax evasion and black money, an official statement said on Thursday.
Addressing the Commonwealth finance ministers meeting in Lima (Peru) on Wednesday, Finance Minister Arun Jaitley said that there is a need to ensure that the Common Reporting Standards on Automatic Exchange of Information are implemented globally on a fully reciprocal basis.
This information exchange would be a key to prevent international tax evasion and avoidance, India’s finance ministry said in a statement.
In June, India signed the Convention on Mutual Administrative Assistance in Tax Matters under the Common Reporting Standard multilateral agreement to automatically exchange financial information.
Jaitley also welcomed the final guidelines on Base Erosion and Profit Shifting (BEPS) issued by the Organisation for Economic Cooperation and Development (OECD), which has developed the common reporting standards.
“He (Jaitley) noted that India has been the beneficiary of these two systems by getting vital information on tax evasion,” the statement added.
Earlier this week, the Paris-based OECD unveiled measures, including country-by-country reporting, a framework to end treaty shopping and curbing harmful tax practices through automatic exchange of information, in an effort to bring transparency in international taxation norms for companies.
OECD Secretary-General Angel Gurria said BEPS is depriving countries of precious resources to revive growth and tackle the effect of the global economic crisis.
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.
India’s revenue secretary Hasmukh Adhia said in New Delhi on Monday 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 with 96 countries.