India signed agreements with France and Germany to check Tax Evasion

India signed a multi-lateral tax treaty with economic powers like France and Germany to check both tax evasion and avoidance. It was signed under the aegis of the Organisation for Economic Cooperation and Development (OECD), a top global financial body, at its headquarters in Paris. 

The agreement, convention on mutual administrative assistance in tax matters, is a multilateral agreement of 31 other nations, which promotes international co-operation while respecting the rights of taxpayers. 

The members under OECD are Australia, Argentina, Belgium, Brazil, Canada, Denmark, Finland, Georgia, France, Germany, Iceland, Italy, Indonesia, Ireland, Japan, Korea, Mexico, Moldova, Netherlands, Norway, Portugal, Poland, Russia, Slovenia, Spain, South Africa, Sweden, Turkey, United Kingdom, Ukraine and the United States.

The multilateral tax treaty is the single legal basis for multi-country cooperation, as against other treaties including the Double Taxation Avoidance Agreement, which are bilateral.OECD was earlier available only for members of the Organisation for Economic Cooperation and Development and the Council of Europe. It was amended in 2010 and thrown open to all countries from  June 2011.

The convention not only facilitates the exchange of information, but also provides for assistance in the recovery of taxes. This will give a fillip to the efforts of the government in bringing money illegally stashed abroad. By signing the convention, India and the other 31 signatories send a strong signal that countries are acting together to ensure that individuals and multinational enterprises pay the right amount of tax, at the right time and in the right place. Many more countries are expected to sign the convention in future. The convention allows tax officials to enter into the territory of the other country to interview individuals and examine records. The information received under the convention can also be used for other purposes besides those related to tax co-operation, including the countering of money laundering with the approval of the supplying state. Out of the 31 signatories, 12 have ratified the convention so far. The signatories to the convention include Brazil, France, Germany, Indonesia, Japan, Russia, Turkey, the UK and the US. For AIR News, this is Manikant Thakur from Delhi.