As a multi-agency probe continues into suspected offshore entities of nearly 500 Indians, India and other G20 nations today vowed to crack down on use of anonymous...
As a multi-agency probe continues into suspected offshore entities of nearly 500 Indians, India and other G20 nations today vowed to crack down on use of anonymous shell companies to launder black money and evade taxes and also create a black-list of uncooperative tax havens.
At the G20 meeting here, which was attended by Finance Minister Arun Jaitley and leaders of other major economies, the grouping supported a proposal to create a black-list of global tax havens that are not cooperating on the international information sharing framework.
As per a draft G20 communique, they also backed a proposal to check tax evaders and entities indulging in money laundering through shell companies for their illicit activities.
The development comes within weeks of leaked ‘Panama Papers’ revealing names of a large number of individuals and shell entities, including nearly 500 from India, being helped by a Panamanian law firm Mossack Fonseca for creating offshore tax haven entities.
India and the US have also agreed to enhance cooperation on tackling offshore tax evasion through information sharing and joint audits, while intensifying efforts to combat money laundering and terror financing.
Jaitley, on the second day of his 7-day visit to the US, met US Treasury Secretary Jacob J Lew for the Sixth Annual US-India Economic and Financial Partnership (EFP) here yesterday and agreed to a dialogue by competent authorities on the two sides to raise engagement on tackling tax evasion.
The US also extended support to National Investment and Infrastructure Fund (NIIF) in a bid to help India raise resources and fund infrastructure growth, said a Joint statement after the meeting.
“We are committed to continued collaboration and sharing of experience in tackling offshore tax evasion and avoidance, including joint tax audits and tax examination abroad. We look forward to the Competent Authorities of the two countries engaging in bilateral dialogue to move forward cooperation in these areas,” it said.
The meeting was also attended by Federal Reserve Chair Janet Yellen and Reserve Bank of India Governor Raghuram Rajan among others.
“We have enhanced our cooperation in tackling money laundering and combating the financing of terrorism through increased information sharing and cooperation, including a dialogue held recently in India. We both agree on the importance of fighting illicit finance in all forms as an important means of tackling global terrorism,” it said.
The two countries noted the progress in sharing of financial information between the two countries under the inter-governmental agreement pursuant to Foreign Account Tax Compliance Act (FATCA).
“The two sides will continue to engage in discussions on full reciprocal arrangement on FATCA. We look forward to increased cooperation in sharing of cross-border tax-information,” the joint statement said.
During the meeting, Lew is believed to have appreciated Jaitley’s effort to successfully resolve more than half of the concerns related to tax disputes.
“Over the past year, our tax authorities resolved a significant portion of bilateral tax disputes between the United States and India,” the statement said.