Tuesday, January 10, 2012

India sticks to its guns on information exchange

A year or so ago we wrote a blog entitled India: don't sign with Liechtenstein arguing that India should not sign an all-singing, all-dancing tax agreement with Liechtenstein. A much narrower tax information exchange agreement would be, while highly imperfect, a far less dangerous approach.

That's the general rule with tax havens: double tax agreements with tax havens open the doors to all sorts of murky shenanigans, while TIEAs open the doors to at least minimal flows of information. Well, we're delighted to see India sticking to its guns in this respect. From the Indian Express:
Liechtenstein, Panama, Seychelles and Bahrain have asked India for a double taxation avoidance treaty instead of tax information exchange arrangement.
Well, it seems, they can't have one. And an Indian official puts the case clearly:
“We don’t have much trade or transactions with these jurisdictions. So it will not be beneficial for us to enter into an arrangement which will lead to a Mauritius-like situation for us,” official sources told The Indian Express.

India wants more of an anti-money laundering treaty and not the one that leads to tax evasion, the official said.

On the other hand, the official added, “They will have more advantage while we would not gain anything apart from information exchange. To suffice our information sharing need, TIEA serves the purpose,” the official added.
Well said. Good to see this tax haven nonsense being resisted.


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