India Renegotiating Its Tax Treaties

The Government has managed to identify nine territories, with which it may negotiate treaties to seek information on tax avoidance. Up till now, India could enter into tax agreements with countries only, but after the amendment was done in Income Tax Act in the Finance Act, 2009, the Government can also enter into agreement with ‘specified’ regions.

According to an official statement, nine areas were accepted by the government as ‘specified territories’. The areas include Cayman Islands, Bermuda, British Virgin Islands, Guernsey, Isle of Man, Jersey, Gibraltar, Netherlands Antilles and Macau.

The statement said, “The central government can, now, initiate and negotiate agreements for exchange of information for the prevention of evasion or avoidance of income tax and assistance in collection of income tax with these nine specified territories”.

The move will make sure that there is no seepage of taxes as well as to exchange information on tax avoidance, according to Sanjiv Chaudhary, the Consultant KPMG Executive Director.

An official statement declared that the process of identifying Hong Kong is also going on. In order to seek information on black money, India has been renegotiating its tax treaties with a lot of countries, including Switzerland.