Black money: New OECD rule to allow easy exchange of tax information
In a major boost to combat the menace of black money across the world, top financial body OECD has amended its rules on obtaining classified tax information by partner countries.
Paris: In a major boost to combat the menace of black money across the world, top financial body OECD has amended its rules on obtaining classified tax information by partner countries.
It has allowed a member country to obtain information about a group of tax payers from another country without verifying their identities separately.
India would also benefit from this change in rule, which is widely seen as an step to increase tax transparency between nations.
The French capital based Organisation for Economic Cooperation and Development (OECD) on Wednesday said that it has updated the Article 26 of the model tax convention in this regard.
This article stands for the international standard on exchange of information related to financial data, including instances of black money and money laundering.
"The OECD has updated Article 26 of the OECD model tax convention, which sets out the international standard on exchange of information.
"The standard provides for information exchange on request, where the information is foreseeably relevant for the administration of the taxes of the requesting party, regardless of bank secrecy and a domestic tax interest," the OECD said in a statement today.
The statement added the amendment explicitly allows for group requests which was not the norm earlier.
"This means that tax authorities are able to ask for information on a group of taxpayers, without naming them individually, as long as the request is not a 'fishing expedition'. This update represents a step forward towards more transparency," the OECD's Centre for Tax Policy said in the statement.
The OECD said the new Article 26 facilitates exchange of tax information among law enforcement agencies to fight tax crimes and other criminal activities more effectively.
"This is in line with the Oslo Dialogue initiative launched by the OECD. All OECD countries have endorsed this latest update," it added.
India also deploys the OECD model convention to elicit and obtain classified tax information from foreign nations.
There are demands for stronger steps to combat the menace of black money in the country.