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Over 600 bilateral tax-related pacts inked worldwide

February 18, 2011 16:38 IST
TaxIn an indication of improving tax transparency, over 600 bilateral pacts related to exchange of tax information have been inked worldwide in less than two years, ever since the influential G20 leaders pledged to crackdown on tax havens.

Amid raging debate on Indians having black money in overseas tax havens, these statistics show that more nations, especially tax havens, are willing to share details on tax-related issues.

A top official of the Paris-OECD, which is leading initiatives on establishing international tax standards, said there has been 'really big progress' in global efforts to make jurisdictions that are considered tax havens more transparent.

"More than 600 bilateral agreements (related to tax information exchange) have been inked by various countries so far (since April 2009)," Pascal Saint-Amans, head of OECD's Global Secretariat told PTI from Paris.

Over 600 bilateral pacts translates to an average of over 27 agreements every month since April 2009.

"Many more jurisdictions have either started or are negotiating such agreements," the official said.

These agreements include tax information exchange pacts, double taxation treaties and protocols to the treaties.

The 34-member Organisation for Economic Cooperation and Development is a grouping of mostly developed countries including the US, France and Germany.

After the G20 leaders' London summit in April 2009, OECD had come out with a list of nations classified on the basis of their compliance with international tax standards.

In the updated list, there are no jurisdictions that have not committed to international tax standards whereas four nations -- Costa Rica, Malaysia (Labuan), the Philippines and Uruguay-- were in that category in April 2009.

Meanwhile, the two-day meeting of finance ministers from G20 countries, including from India, China and the US, that began today in Paris is also expected to discuss issues related to tax havens and soaring food prices, among others.

Finance Minister Pranab Mukherjee said on Friday he would press for transparency in the functioning of tax havens to unearth 'ill-gotten' money lying in such sovereign jurisdictions at the meeting.

The Indian government is facing intense pressure from Opposition parties and Supreme Court to bring back black money allegedly stashed away by Indian citizens abroad. Currently, India has Double Taxation Avoidance Agreements with 78 countries.

In recent times, India has signed Tax Information Exchange Agreements with four jurisdictions -- the British Virgin Islands, Isle of Man, the Bahamas and Bermuda.

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