Have toolbox to deal with tax havens not sharing info
New Delhi: Under pressure from civil society to take concrete action on black money, the government on Monday said it has enough tools to deal with transactions arising from non-cooperative jurisdictions and would take action as and when necessary.
"We have developed a toolbox… We have enabled ourselves to declare (tax havens) as non-cooperating jurisdiction and countries as and when the situation arises. We will take appropriate steps," Finance Minister Pranab Mukherjee told reporters here today.
However, he added that as of now, "no country" has been put in the category of a "non-cooperating jurisdiction".
India, the minister said, is negotiating Double Taxation Avoidance Agreements (DTAA) with several countries and also entering into Tax Information Exchange Agreements (TIEA) with tax havens.
"We are getting substantial cooperation," he said.
The government, the minister further added, has developed a "toolbox" to deal with non-cooperative jurisdictions by making appropriate changes in the Income Tax Act, 1961.
As per the "toolbox" to check black money, payments made to entities located in countries and tax jurisdictions that refuse to share tax-related information will attract a withholding tax, or tax deducted at source, of 30 per cent or more.
The G-20 leaders had asked each country at their Seoul summit last year to develop a toolbox of counter-measures against non-cooperative jurisdictions.
Under the proposed provisions, the government will notify the countries and jurisdictions that are reluctant to share banking information and other details with it.