Union Cabinet approves Agreement between India and Samoa for exchange of information with respect to Taxes

The Union Cabinet has given its approval for signing and ratification of Agreement between India and Samoa for the exchange of information with respect to Taxes.
It will help to stimulate the flow of exchange of information between India and Samoa for tax purposes which will help curb tax avoidance and tax evasion.
Key features of agreement

• Enables competent authorities of both countries to provide assistance through exchange of information with respect to Taxes
• Information received under agreement will be treated as confidential and may be disclosed only to persons or authorities including administrative bodies or courts.
• Information will be disclosed to any other person or authority or jurisdiction with the prior written consent of the information sending country.
• Provides for Mutual Agreement Procedure for agreeing on procedures or for resolving any difference or under the Agreement.

Background:

• The Union Government under section 90 of the Income Tax Act, 1961 is authorized to enter into an Agreement with a foreign country with respect to Taxes
• It is mainly for exchange of information for the prevention of avoidance or evasion of income-tax chargeable under the Income-tax Act, 1961.
• Negotiations for Agreement were finalized between India and Samoa in June, 2016 and both countries have agreed on the text of the Agreement.

Month: Current Affairs - September, 2016