India, Seychelles sign pact to curb black money
What's the story
In its fight against black money, India inked an information exchange agreement with Seychelles.
The agreement was signed after talks between Prime Minister Narendra Modi and the visiting Seychelles President James Alix Michel.
It is meant to curb tax evasion and avoidance.
Among other agreements signed to increase cooperation, both the countries have included pacts to deepen ties in security and defence.
Introduction
What is a Tax Information Exchange Agreement?
Tax Information Exchange Agreement (TIEA) provides for the exchange of information on request relating to a specific criminal or civil tax investigation or civil tax matters under investigation.
It was originally developed for the OECD countries.
It now extends to 127 countries that are members of the Global Forum-a body for ensuring the implementation of internationally agreed standards of transparency and exchange of information.
Information
What is DTAA?
Double Taxation Avoidance Agreement (DTAA) is another instrument to tackle black money abroad. It provides for cooperation from agreed countries in cases of fiscal evasion. India currently has 88 DTAAs, of which 85 are in force.
19 May 2015
India in talks with 28 nations for TIEA
In its quest to draw information on illegal incomes stashed abroad, India is in negotiations with as many as 28 different countries/jurisdictions for tax information exchange agreement (TIEA).
This agreement will enable Indian tax authorities to receive banking related information even from offshore jurisdictions that are commonly considered as tax havens.
Maldives, Seychelles and Honduras are some countries part of the negotiations list.
20 Aug 2015
Cabinet ratifies India-Seychelles tax exchange pact
Cabinet approved the signing and ratification of agreement between India and Seychelles to exchange information on taxes.
Union Minister Ravi Shankar Prasad said "any abuse of land of India or Seychelles for money transaction in an unauthorized manner, regardless of the fact that he is a resident or not, is amenable to prosecution".
Negotiations on this were conducted at Seychelles from 8-9 June 2015.
Definition
Tax Havens
A tax haven is a state, country or territory where, on a national level, certain taxes are levied at a very low rate or not at all. As per a list published by EU, these include Cayman Islands, Bahamas, Monaco, Mauritius, Seychelles, Maldives etc. among others.