India, OECD to join forces on cross-border taxation issues

India and Organisation for Economic Cooperation and Development (OECD) -- grouping of mostly industrialised nations -- have agreed to strengthen cooperation in cross-border taxation issues, the Finance Ministry said today.

The increased co-operation with Paris-based OECD comes at a time when India is grappling with issues of tax evasion and blackmoney stashed in off shore accounts.

"Both (India and OECD) agreed for enhanced tax cooperation and suggest measures which will provide greater certainty to both taxpayers and the governments," the ministry said in a statement.

OECD has appreciated the action taken by India in handling tax evasion and blackmoney issues.

Indian government has adopted a five-fold strategy to tackle the menace of illicit funds which include joining the global crusade against blackmoney and creating appropriate legislative framework.

During a two-day high level tax conference that concluded yesterday, they also decided to enhance their cooperation in dealing with issues relating to transfer pricing.

The two sides will also promote better tax compliance and measures to improve the prevention and regulation of cross border dispute, it added.

In the seminar, participants explored some of the most complex challenges posed by the taxation of multi-national enterprises in a global economy.

India's growing integration into the global economy has exposed its tax policies to the same challenges facing the industrialised countries, notably how to adapt its domestic tax system and its international tax policies to a borderless economy.

India and OECD also announced plans to strengthen ongoing co-operation on tax-related issues through the development of a three-year partnership that will provide greater opportunities for structured dialogue and sharing of information.