India, China and four others courtiers sign pact on tax info sharing

India and other 5 countries viz. Canada, Iceland, Israel, New Zealand and China have signed OECD’s (Organisation for Economic Co-operation and Development) Multilateral Competent Authority Agreement in Beijing (China).
The multilateral agreement aims at boosting automatic exchange of information on tax issues and developing new tools to tackle the tax evasion.
Key facts

• The pact allows all signatories to bilaterally and automatically exchange Country-by-Country Reports with each other.
• It is designed to provide tax administrations with information needed to combat tax avoidance through transfer pricing.
• It will help ensure that the tax administrations obtain a complete understanding of how the MNCs structure their operations by safeguarding confidentiality of such information.

With this, these 6 countries have joined 33 other countries that have already signed the agreement including Australia, France, Germany, Japan, Malaysia, Italy and United Kingdom.
The multilateral agreement seeks to give effect to standards developed in G20/ OECD base erosion profit shifting (BEPS) project. The project is concerned with transfer pricing documentation and country-by-country reporting.

Month: Current Affairs - May, 2016