Multilateral Convention relating to Tax Matters inked by India
· Indian finalized a Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
- This device as yet was available only for the members of Council of Europe and OECD , but was amended in 2010 and thrown open to all countries from last June.
- The Meeting was amended to answer this year’s G20 call for creating a larger multilateral strategy to improve the potency of change of information, co-operation between the nations around the world in the analysis and selection of taxation, with a view to fighting tax prevention and evasion.
- The present signatories to the amended Convention are: Argentina, Australia, Belgium, Brazil, Canada, Denmark, Finland, France, Georgia, Germany, Iceland, India, Indonesia, Ireland, Italy, Japan, Korea, Mexico, Moldova, Netherlands, Norway, Poland, Portugal, Russia, Slovenia, South Africa, Spain, Sweden, Turkey, Ukraine, the United Kingdom, and the United States.
- By signing the convention, India and the other 31 signatories motivate more nations around the world to become a member of it, thus delivering a powerful indication that nations around the world are working together to make sure that people and international corporations pay the right quantity of tax, at the best and in the right position. More nations are expected to sign the Convention in future. This provides for a wider network of countries co-operating in exchange of information and assistance in tax collection.
- Out of the 31 signatories, 12 of them have ratified the Convention so far. Out of the 31 signatories, 12 have ratified the convention so far. The signatories to the convention include Brazil, France, Germany, Indonesia, Japan, Russia, Turkey, the UK and the US.
The salient features of this Multilateral Convention are:-
- Based on international standard of transparency and exchange of information.
- A multilateral and a single legal basis for multi-country cooperation as against the DTAAs (Double Taxation Avoidance Agreements) and TIEAs (Taxation Information Exchange Agreements) which are bilateral.
- Allows for an extensive network and there will be coherent application of provisions leaving limited scope for deflection.
- Allows all-embracing forms of cooperation among the signatories on all taxes.
- Facilitates the exchange of information, and at the same time also provides for assistance in the recovery of taxes. This will give a boost to the efforts of the Indian Government in fetching the Indian money illegally cached overseas.
- Provides for concurrent tax examinations and participation in tax examinations in other countries. This allows for examination of tax affairs of the taxpayers simultaneously in their own territory and share the relevant information to each other. This allows tax officials to enter into the territory of the other country to interview individuals and examine records.
- Allows for automatic exchange of information and spontaneous exchange of information.
- Allows for service of documents in other country.
- Provides exchange of past information in criminal tax matters.
- The information received under the convention can also be used for other purposes besides those related to tax cooperation, for example to counter money laundering with the approval of the supplying state.
Topics: Common Reporting Standard • Convention on Mutual Administrative Assistance in Tax Matters • Double taxation • International taxation • Law by country • Politics by country • Tax • Tax haven • Tax treaty • Value-added tax