India today said it will renegotiate with all the 77 countries with which it has double tax avoidance treaties to track tax evasion following allegations of black money being stashed by many Indians in Swiss banks.
Tax Treaty“I have asked Revenue Department to reopen negotiations for all 77 double tax avoidance agreements with all countries which we have entered so far so that we can have real time exchange of information on tax evasion and tax avoidance,” Finance Minister Pranab Mukherjee said at the India Economic Summit.
A team of Revenue Department senior officials is expected to go to Switzerland to begin talks on amending the double taxation avoidance agreement with that country.
Political parties had raised the issue of black money being stashed in Swiss banks in the last Lok Sabha elections and a petition to this effect is pending in the Supreme Court.
Further, with regard to tax avoidance through treaty-shopping, Mukherjee said that the country had agreed to accept the guidelines prescribed by the OECD model tax convention code which talks about exchange of information.
Treaty shopping refers to taking advantage of double tax avoidance agreements by routing investments through the low tax or no tax countries.