Negotiations on with 25 countries to tap wealth stashed abroad

Negotiations for tax information exchange agreements (TIEA) are in full swing with 25 more countries.

The Finance Ministry has revealed this in a fact sheet outlining the initiatives taken by the Government for unearthing and curbing black money.

The 25 countries include Andora, Faroe Islands, Grenada, Jamaica, Peru, Curacao, Sint Maarten, Anguilla, Antigua and Barbuda, Aruba, Barbados, Belize, Brunei Darussalam, Cook Islands, Montserrat, Saint Vincent, San Marino, Vanuatu and Turks and Caicos.

Concealed income

The concept of TIEA is a result of the work undertaken by Paris-based Organisation for Economic Cooperation and Development to address harmful tax practices. Adding this to the 22 countries with whom TIEA negotiations commenced in 2009, the total number of countries with which India is now looking to engage for such pacts is 47.

This is a clear pointer to India’s continued quest to draw information on concealed incomes stashed abroad in tax havens, say some tax experts.

The Government has been facing criticism that it has done very little to get back the ill-gotten wealth stashed by Indians in tax havens abroad.

In end December last year, the then Finance Minister Pranab Mukherjee had given his nod for India to expand its engagement with low-tax jurisdictions/ tax havens for concluding such pacts.

India has been looking to conclude TIEAs with only those countries with which it does not want to have double tax avoidance agreements (DTAAs) at this stage.

Of the 22 earlier identified jurisdictions for which TIEA discussions commenced in 2009, negotiations have been completed for 17. Of this, 12 TIEAs have been signed and 9 have come into force.

The nine jurisdictions with which TIEAs have entered into force are the Bahamas, Bermuda, British Virgin Islands, Cayman Islands, Isle of Man, Jersey, Guernsey, Liberia and Macau. An objective of TIEA is to promote international co-operation in tax matters through exchange of information. The nature of this information varies from agreement to agreement.

The fact sheet also highlighted that it was acting on information received from other countries under DTAA. In the case of information from Germany and France, tax evasion of more than Rs 600 crore has been detected and Rs 200 crore realised.


Prosecution proceedings have been launched in 17 cases pertaining to LGT Bank accounts. Assessment proceedings have been initiated in cases relating to HSBC accounts, the Finance Ministry has said.

The fact sheet also noted that the directorate of international taxation has collected taxes of Rs 48,951 crore from cross border transactions in last two financial years. Investigation wing of CBDT detected concealed income of Rs 19,938 crore in last two financial years.

(This article was published on August 10, 2012)
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