As reported by us earlier The government is planning to comprehensively revise tax treaties with as many as 25 nations, including Switzerland and Mauritius, and re-negotiate with 51 others, to trace black money. The government plans a comprehensive revision of the existing tax treaties with 25 countries, including the Swiss Confederation, Mauritius, Malaysia, Norway and the Netherlands among others.

It might also review tax treaties with 51 nations on a limited scale, which meant the revision would only be with regard to the clauses in the treaty on exchange of information or assistance in tax collections, sources in the finance ministry said.

For countries like Australia, China, France and Germany, the government may rework the double taxation avoidance agreements (DTAA) only to the extent of getting information on those who may have stashed wealth in their banks.

A comprehensive revision meant the revision was not confined to the articles on exchange of information or assistance in collection of taxes but other areas in the treaty also needed to be revised, sources informed.

There have been reports of crores of rupees being stashed in foreign banks. However, to get information in this regard, the government would have to revisit the clauses in the tax treaty so that information could be exchanged easily.

Money allegedly stashed away by Indians in secret Swiss bank accounts had assumed political overtones in the past general elections.

However, the Swiss Bankers Association had said the country’s law and tax model convention did not permit a name-fishing expedition by a third country.

India, denied it was on a “fishing expedition”, seeking information about every banking account in Switzerland, allegedly deposited by Indians.

Finance Minister Pranab Mukherjee had said India was only seeking details about some specific accounts from Switzerland.

“They (Swiss Bankers Association) have not refused (to divulge information). They have suggested they are not for fishing and we are also not interested in fishing their whole list (of bank accounts),” Mukherjee had said.

Last month, a team of finance ministry officials went to Switzerland to start negotiations on reworking the tax treaty so that information on these issues could be obtained, among other matters.

The countries where tax treaties need to be revised comprehensively are mostly low-tax or no-tax nations or tax havens, and most of the foreign investments into the country come routed through these nations.

Foreign investors route their investments through these nations to avoid payment of taxes in India. The comprehensive revision of tax treaty would address these issues too.

Also, there were more nations like the Philippines, South Korea and Italy with which India would revise tax treaties comprehensively, the sources said.

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Category : Income Tax (27860)
Type : News (13801)
Tags : black money (729) Tax Treaty (51)

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