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| Black money trail: Govt mulls tax treaty review with 76 nations |
| Press Trust of India / New Delhi Dec 06, 2009, 17:03 IST |
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The government is planning to comprehensively revise tax treaties with as many as 25 nations, including Switzerland and Mauritius, and re-negotiate with 51 others, to trace black money.
The government plans a comprehensive revision of the existing tax treaties with 25 countries, including Swiss Confederation, Mauritius, Malaysia, Norway and the Netherlands among others.
On other hand, it may review the tax treaties with 51 nations on a limited scale, which means that the revision would only be with regard to the clauses in the treaty on exchange of information or assistance in tax collections, sources in the Finance Ministry said.
For countries like Australia, China, France and Germany, the government may rework the double taxation avoidance agreements (DTAA) only to the extent of getting information on those who may have stashed wealth in their banks.
A comprehensive revision means that the revision is not confined to the articles on exchange of information or assistance in collection of taxes but other areas in the treaty also need to be revised, sources informed.
There have been reports of crores of rupees being stashed in foreign banks. However, to get the information in this regard the government would have to revisit the clauses in the tax treaty so that information can be exchanged easily.
Money allegedly stashed away by Indians in secret Swiss bank accounts had assumed political tones in the past general elections.
However, the Swiss Bankers Association had said the country's law and tax model convention does not permit name- fishing expedition by a third country.
India, denied that it was on a "fishing expedition" seeking information about every banking accounts in Switzerland, allegedly deposited by Indians.
Finance Minister Pranab Mukherjee had said India is only seeking details about some specific accounts from Switzerland.
"They (Swiss Bankers Association) have not refused (to divulge information). They have suggested they are not for fishing and we are also not interested in fishing their whole list (of bank accounts)," Mukherjee had said.
Last month, a team of the Finance Ministry officials went to Switzerland to start negotiations on reworking the tax treaty so that information on these issues could be obtained among other matters.
The countries where the tax treaties need to be revised comprehensively are mostly low-tax or no-tax nations or tax havens, and most of the foreign investments into the country come routed through these nations.
Foreign investors route their investments through these nations to avoid payment of taxes in India. The comprehensive revision of tax treaty would address these issues also.
Also, there are more nations like the Philippines, South Korea and Italy with whom India would revise the tax treaties comprehensively, the sources said.
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