India and British Virgin Islands have signed a tax information exchange agreement (TIEA) in London on Wednesday. This is the third TIEA signed by India, with the first two being with Bermuda and Isle of Man.
The TIEA with British Virgin Islands was signed by Mr Nalin Surie, High Commissioner of India to the United Kingdom from the Indian side and Ms Dancia Penn, Deputy Premier of the British Virgin Islands from British Virgin Islands side.
Besides a specific provision for banking and ownership information, the TIEA also allows exchange of past information on criminal tax matters. As per the TIEA, information will have to be treated as secret and can be disclosed to only specified person or authorities, who are essentially tax authorities or authorities concerned with the determination of tax appeal.
The TIEA also provides for disclosure of information to any other person or authority or any other jurisdiction with the written consent of the competent authority of the requested Party. Also, information must be foreseeably relevant to the administration and enforcement of the domestic laws of the contracting parties concerning taxes and tax matters covered by the agreement.
There is also a specific provision that the requested Party shall provide upon request the information even though that Party may not need such information for its own tax purposes.
The Centre has already completed negotiations of TIEA with 10 countries/jurisdictions namely—Bahamas, Bermuda, British Virgin Islands, Isle of Man, Cayman Islands, Jersey, Monaco, St Kitts and Nevis, Argentina and Marshall Islands. Cabinet approval has been obtained for eight of these ten jurisdictions/countries and three TIEAs including the latest with British Virgin Islands have now been signed.
The concept of TIEA is a result of the work undertaken by the Paris-based Organisation for Economic Cooperation and Development to address harmful tax practices. An important objective of the TIEA is to promote international cooperation in tax matters through exchange of information. The nature of tax related information that could be shared under a TIEA varies from agreement to agreement.