Amid widespread anxiety following the leak of offshore account details in the Panama Papers, India and the US have agreed to enhance collaboration on tackling offshore tax evasion and increase cooperation in sharing of cross-border tax information. The Panama Papers revealed how world leaders, businessmen, sportspersons and celebrities use offshore accounts in tax havens to hide their wealth, evade taxes and launder money.
“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,” India’s Finance Minister Arun Jaitley and US Treasury Secretary Jacob Lew said in a joint statement on April 14. Mr Jaitley is in the US on a week-long visit.
During the meeting, Mr Lew acknowledged and appreciated Mr Jaitley’s efforts to successfully resolve more than half of the concerns related to tax disputes. “Our governments have begun to accept bilateral Advance Pricing Agreement applications by companies in both jurisdictions in an effort to enhance cross-border business processes and strengthen our commercial ties,” the joint statement said.
India and the US reiterated the need to continue engaging in discussions on full reciprocal arrangement on Foreign Account Tax Compliance Act (FATCA). The two countries discussed the progress made in sharing of financial information between the two countries under the Inter-Governmental Agreement.
With a focus on enhanced cooperation in tackling money laundering and combating financing of terrorism through increased information sharing and cooperation, Mr Jaitley and Mr Lew stressed on the need to fight illicit finance in all forms as an important means of tackling global terrorism.
Emphasising on the regulators of both countries coming together, the statement said: “The US-India Financial Regulatory Dialogue has brought together the financial regulators on both sides to discuss a range of issues pertinent to their financial sectors and to financial stability.” The joint statement further added that the expert officials from the US Treasury department and India’s Ministry of Finance were having consultations on the US experience and international perspectives on the regulatory design for India’s recently launched payment banks.
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