India has signed a tax information exchange agreement (TIEA) with Cayman Islands. This is the fifth TIEA entered into by India in recent times.

The agreement was signed on Monday by Mr Mohinder S.Grover, High Commissioner of India to Jamaica (concurrently accredited to the Commonwealth of The Bahamas) from the Indian side and Mr McKeeva Bush, Premier and Minister for Finance and Tourism Development from Cayman Islands' side.

Pact specifics : Under the TIEA, the information sought 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.

Also, the requesting State has to provide some minimum details about the information requested in order to justify the ‘foreseeably relevant' criteria.

There is also a specific provision for providing banking and ownership information. The information will be treated as secret and can be disclosed to only specified persons or the authorities concerned with the determination of tax appeal.

India has so far signed TIEAs with Bermuda, British Virgin Islands, Bahamas and Isle of Man. 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 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.

krsrivats@thehindu.co.in

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