Countries must collaborate in tax matters as new financial products emerge and the economies become more digital, Finance Minister Nirmala Sitharaman said on Tuesday. Evolving structures of “beneficial ownership” necessitate continued cooperation between jurisdictions, she noted.
Addressing the 18th Plenary meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes in New Delhi, Sitharaman underscored the importance of maintaining confidentiality and cybersecurity with utmost care and stated that these challenges cannot be addressed alone by any single country and require coordination, trust, and timely exchange of relevant information.
What is beneficial ownership?
Beneficial ownership refers to individuals who own or control a company even if the legal title or registered ownership is held by someone else. It is vital to collect beneficial ownership information for promoting transparency, preventing financial crimes such as money laundering and terrorism financing, and maintaining accountability within corporate structures.
In India, the Companies Act, 2013 mandates that every company shall file a return of significant beneficial owners of the company and changes therein with the Registrar containing names, addresses and other details as may be prescribed within such time, in such form and manner as may be prescribed.
Sitharaman on development of global economies
The finance minister said that in a global economy, stable and trusted relationships between jurisdictions are paramount. “Where trust exists, cooperation becomes easier, investments grow, and economic relationships become more stable, she said.
Highlighting the critical role of the global forum developing standards and supporting countries, Sitharaman said the need for countries to collaborate to deepen current standards and ensure that the information exchanged translates into measurable outcomes.
Sitharaman underscored the significance of transparency in tax matters for India. She explained that transparency has always transcended administrative reform, as evident in India’s laws against illicit financial flows and undisclosed foreign assets, as well as its participation in both the exchange of information on request and the automatic exchange of information standards.
The minister also noted that over the past decade, India has witnessed visible strengthening of voluntary compliance.
According to OECD Tax, during the three-day meeting of Global Forum, members will hold discussion on emerging challenges and drive global progress in tax transparency.
As many as 400 delegated from more than 120 jurisdictions and 12 international bodies taking part in the meeting. The OECD also stated that 75 jurisdictions have thus far committed to implementing the new Crypto-Asset Reporting Framework with the first automatic exchange of information on crypto assets starting in 2027. It also stated that information on 171 million financial accounts covering EUR 13 trillion in total assets were automatically exchanged in 2027.