Several countries that have amended their tax laws to suit the tax information exchange requests from nations like India.
In a major push to its efforts to unearth illegal funds stashed in tax havens, India has got indications from various countries promising strengthening of legal framework for exchange of tax and banking information.
Austria, the British Virgin Islands, Liechtenstein, Luxembourg, Belgium and the Cayman Islands are some of the major countries that have amended their tax laws to suit the tax information exchange requests from nations like India.
The information pertains to data (reports) India receives by virtue of it being a member of the 'Global Forum on Transparency and Exchange of Information for Tax Purposes' under the aegis of the Paris-based Organisation for Economic Cooperation and Development (OECD).
"The reports describe each jurisdictions rule for ensuring that information is available to the tax authorities, how it can be accessed by authorities and the mechanisms in place to exchange information with foreign tax authorities," a finance ministry official privy to the development said quoting a OECD statement in this regard.
Citing one such report, the official said that Cayman Island has strengthened and reviewed its laws with respect to "nominees and the availability of ownership information".
Similarly, Belgium in April this year enacted a new law "granting access to bank information to all its treaty partners upon condition of reciprocity. The supplementary report of Belgium notes that thanks to this new law, exchange of information to the standard can now take place with more than 80 of Belgium's partners", which includes India.
"These peer review reports are important as they reassure our efforts to fight against black money and illegal offshore funds. This bodes well for India as better cooperation with all nations is necessary to work successfully on this front," the official said.
The finance ministry, through its foreign taxation wing in the Central Board of Direct Taxes (CBDT), is reviewing and signing a host of Tax Information Exchange Treaties (TIEAs) and Double Taxation Avoidance Agreements (DTAA) to take forward its enforcement against black money.
Austria too has enacted a new legislation for allowing access to bank information to help international partners.
However, a number of measures to enhance cooperation and transparency by other nations has also been underlined by the OECD. The measures are also advocated by countries like India in their treaties.
While the British Virgin Islands has made progress in improving its legal and regulatory framework in order to effectively exchange tax information it needs to do more to ensure availability of information on trusts and reliable accounting records, the report said.
"Also, the authorities (of British Virgin Islands) do not have sufficient powers to obtain all foreseeably relevant information in order to respond to international requests," the report said.
With regard to Liechtenstein, the report "identified gaps concerning availability of ownership and accounting information" which can be strengthened further.
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