India and the United States have decided to enhance cooperation for automatic exchange of information on tax evasion and detection of financial crimes, shoring up efforts to crackdown on blackmoney cases involving economic channels of the two countries.
A team of the US Treasury officials recently met Indian Income Tax and CBDT officials for negotiating an Inter-Governmental Agreement (IGA) which will enable faster access to tax evasion related information and tax crimes by individuals and entities of the two countries.
India, since 2009, has a Double Taxation Avoidance Agreement (DTAA) treaty with the US which is also under revision for betterment of protocols.
"The US is a strategic partner when it comes to combating blackmoney and automatic exchange of classified information on tax evasion cases. High-level negotiations are underway to enter into a IGA as stipulated under the Foreign Account Tax Compliance Act (FATCA) of the economic superpower," sources privy to the development told the news agency..
The Central Board of Direct Taxes (CBDT), which is the nerve agency of the government in blackmoney cases as it administers the I-T department, recently also began talks on the Mutual Agreement Procedure (MAP) with the US officials.
These talks, sources said, have begun after an interval of more than a year and two rounds of discussions have already been held between the authorities."In fact, four important cases under MAP were resolved with the US during this financial year," the sources said.
MAP is an alternative available to taxpayers for solving disputes giving rise to double taxation, whether judicial or financial. The MAP procedures are also listed in the DTAA Apart from India, the US is also talking to over 50countries and jurisdictions across the globe to enhance international tax compliance and to implement information reporting and withholding tax provisions in its country, known as the FATCA.The IMG is the precursor to such an agreement.The FATCA, created in 2010, is aimed ato targeting non-compliance by US taxpayers using foreign accounts.