NEW DELHI: In a major move against black money stashed away abroad, the union cabinet on Thursday approved the signing and ratification of an agreement between India and Seychelles for exchanging information on tax issues.
"The government is fully committed to tackle black money. This is a very important agreement with Seychelles for the exchange of information in this regard," Communications and Information Technology Minister Ravi Shankar Prasad told reporters after a cabinet meeting chaired by Prime Minister Narendra Modi.
An official statement said that "information received under the agreement shall be treated as confidential and may be disclosed only to persons or authorities (including courts or administrative bodies) concerned with assessment, collection, enforcement, prosecution or determination of appeals, in relation to taxes covered under the agreement".
Last month, India and the US signed an inter-governmental agreement to implement the Foreign Account Tax Compliance Act (FATCA) towards greater transparency between the two countries on tax matters. Last November, in Australia, India and the other G20 countries agreed to automatically exchange tax information on a reciprocal basis by the end of 2018.
Salient features of the agreement with Seychelles:
* Permits both countries to exchange of information for enforcement of domestic tax laws.
* Information received under the agreement shall be treated as confidential, to be disclosed only to persons or authorities in relation to taxes covered under the agreement.
* Provides for a Mutual Agreement Procedure for resolving any difference or for agreeing on procedures.
* Agreement will enter into force on the date of notification of completion of procedures.
* No financial implications, except where extraordinary costs exceed $500, which will be borne by the government of India.