New Delhi, Dec.21 (ANI): India is close to signing collaborative jurisdictional agreements with three countries - Singapore, the United Arab Emirates and Hong Kong - for dealing with challenges related to the siphoning of black money, said the Central Board of Direct Taxation (CBDT).
A spokesperson of the CBDT told ANI in an e-mail interview that the CBDT is in the process of coming up with a revised note before December 31, 2015 that will provide guidance to financial institutions, regulators and tax department officers for ensuring compliance of norms decided at the recent sixth meeting of Automatic Exchange of Information (AEOI) which held in Delhi this month.
"Dubai, Hong Kong and Singapore will fall under jurisdictions which have committed for AEOI from 2018, although they have yet to sign the Multilateral Competent Authority Agreement (MCAA) for the AEOI," the CBDT spokesperson informed ANI.
"Once Singapore and the UAE sign the MCAA, India would be able to exchange information automatically with these countries from 2018 onwards, where as the treaty negotiation with Hong Kong is underway," the spokesperson added.
The CBDT spokesperson further revealed that AEOI will help create an environment of transparency between 75 countries that have signed the MCAA, including nations like Switzerland and the Brtish Version Ireland (BVI) etc.
"The AEOI, when fully implemented, would enable India to receive information from every country in the world, including offshore financial centres and tax havens, and would be the key to prevent international tax evasion and avoidance, and would be instrumental in getting information about money stashed," the spokesperson added.
She also revealed that the CBDT has constituted an "Information Security Committee" to ensure confidentiality of date received from foreign countries that will ensure a transparent environment to deal with the problem and challenges of black money.
The Information Security Committee, she said, "will apply processes such as ratification and information security policies and procedures (ISPP) to ensure implementation and management review, besides focus on maintaining continuing suitability, adequacy and effectiveness of ISPP."
External security reviews and ensuring that action is taken to rectify any identified shortfalls will be the Information Security Committee's top-most priority, along with its responsibility for taking disciplinary action in cases of a breach of the ISPP, the CBDT spokesperson said.
Insofar as Non-Resident Indians (NRIs) were concerned, the CBDT said that the AEOI sees NRIs, green card holders and students residing in the United States as being already covered under the Fair and Accurate Credit Transactions Act (FACTA) between India and the United States, but added that the AEOI can take special privilege in including them under its committee.
It may be recalled that at the sixth meeting of the AEOI, Minister of State for Finance Jayant Sinha had said that non-disclosure of foreign assets will increasingly become a risky affair for tax payers, as strict bank secrecy will ensure sooner than later a new environment of operational transparency.