TAX NEWS - JUNE 2010

Over 32 tax pacts inked globally every month

More than 32 bilateral agreements related to tax information sharing, are inked worldwide every month, since the G-20 leaders pledged to crackdown on tax havens in April 2009.

In signs that more countries are willing to share information on tax related issues, over 440 bilateral tax pacts have been signed so far, which translates to an average of over 32 tax pacts every month since last April.

"To date, since April 2009, over 440 agreements providing for information exchange have been signed," a senior official of the Organisation for Economic Cooperation and Development (OECD) told PTI from Busan, South Korea.

The Paris-based OECD, a grouping of mostly developed countries, is leading the initiatives on setting international tax standards. "(Out of the over 440 agreements), 290 tax information exchange agreements and more than 150 double taxation treaties or pr otocols to the treaties, including article 26 which provides for information exchange to the standard," the official noted.

The official is in South Korea to attend the G-20 finance ministers' meet, which concluded on Saturday. The leaders of the G-20 had pledged to crackdown on tax havens during their summit in April 2009. Immediately after the pledge, the OECD came out with list of countries based on their compliance with international tax standards.

Since last April, as many as 28 jurisdictions have joined the list of countries that have substantially implemented the international tax standards. Going by the latest OECD list, the countries that have not committed to international tax standards were four - Costa Rica, Malaysia (Labuan), the Philippines and Uruguay - in that category last April. Meanwhile, India is continuing with its efforts to track down black money stashed away by Indians overseas. Recently, finance minister Pranab Mukherjee had said New Delhi has already completed talks with Switzerland on amending the bilateral taxation agr eement to seek information about funds parked by Indians in that country.

"We've been able to complete the negotiations (on tax treaties) with Switzerland... We've accepted the OECD clause 26 (article 26) earlier in our double taxation avoidance agreements," he had said in Parliament.