Lok Sabha Question No. 4722 (UNSTARRED), answered on 2020-03-23
Subject: Revenue Agencies
Ministry: FINANCE
Asked by: Pinaki Misra

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION NO. 4722

To be answered on Monday, the 23 rd March, 2020

CHAITRA 3, 1942(SAKA)

## REVENUE AGENCIES

## 4722: SHRI CHANDRA SEKHAR SAHU:

DR. PRITAM GOPINATHRAO MUNDE:

## Will the Minister of FINANCE be pleased to state:

(a)  whether  the  Government  is  considering  for  closer  collaboration  between  international  revenue agencies to investigate tax affairs of offenders who cross borders for escaping tax investigation;

(b) if so, the details thereof;

- (c) whether India has participated in the meeting held under Saudi Arabia's G20 presidency;
- (d) if so, the consensus arrived at in the aforesaid meeting; and

(e) the steps taken or proposed to be taken by the Government to design a new international tax system to handle the challenges of digitalization with a cost efficient dispute prevention mechanism?

## ANSWER

## MINISTER OF STATE IN MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

(a) & (b): The Government of India takes actions as per the provisions of the direct tax laws in respect of persons  found  to  be  indulging  in  violation  of  direct  tax  laws,  including  persons  who  cross  borders  to escape  tax  investigations.  The  Government  of  India  has  actively  participated  in  the  efforts  to  forge  a multi-lateral regime for automatic sharing of financial account information to assist the global efforts of combating tax evasion. This Automatic Exchange of Information (AEOI) based on Common Reporting Standard (CRS) has commenced from 2017 enabling India to receive financial account information of Indian residents in partner jurisdictions. India has also entered into an Inter-Governmental Agreement

(IGA) in 2015 for exchange of financial account information on automatic basis with USA based on the Foreign Accounts Tax Compliance Act (FATCA) of USA.

Indian  Government  has  been  proactively  engaging  with  foreign  governments  under  the  relevant provisions  of  Double  Taxation  Avoidance  Agreements/  Tax  Information  Exchange  Agreements  / Multilateral  Convention  on  Mutual  Administrative  Assistance  in  Tax  Matters/SAARC  Multilateral Agreement to obtain information including banking information on request in specific cases.

These  mechanisms  allow  exchange  of  information  between  India  and  the  other  jurisdictions  for  tax purposes including information in respect of persons who cross borders for escaping tax investigations.

(c):  Yes  Sir.  India  has  participated  in  all  the  meetings  held  under  Saudi  Arabia's  G20  presidency including  the  recent  meeting  of  the  G20  Finance  Ministers  and  Central  Bank  Governors  held  from February 22 nd -23 rd , 2020 at Riyadh.

(d): In the area of taxation, the G20 has welcomed the progress made on implementing the internationally agreed tax transparency standards. The G20 has agreed for considering defensive measures against those jurisdictions  who  do  not  comply  with  such  standards.  The  G20  has  also  endorsed  the  Outline  of  the Architecture of a Unified Approach on Pillar One as the basis for negotiations and  has welcomed the Progress  Note  on  Pillar  Two,  both  of  which  were  agreed  by  the  G20/OECD  Inclusive  Framework  on Base  Erosion  and  Profit  Shifting  (BEPS).The  G20  has  stressed  the  importance  of  the  G20/OECD Inclusive  Framework  on  BEPS  agreeing  on  the  key  policy  features  of  a  global  and  consensus  based solution  for  addressing  the  tax  challenges  arising  from  digitalization  by  July  2020.  There  was  also  a consensus on supporting tax capacity building in developing countries.

(e) India is participating in the ongoing work being undertaken in the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS) for addressing the tax challenges arising from digitalization. It  is  supporting  the  work  to  tax  digital  economy  being  undertaken  and  putting  forth  its  position emphasizing on dispute prevention through clear and simple rules to prevent disputes.

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