India Seeks To Include Exchange Of Information Rules In All DTAAs

by Lorys Charalambous, Tax-News.com, Cyprus

01 April 2005

India’s government is seeking to include exchange of information provisions in all existing and future bilateral double taxation avoidance agreements, including the Indo-Mauritius DTAA, national media reports indicate.

According to revelations by Finance Ministry officials, the decision stems from the government’s desire to see that DTAAs are not misused for the purposes of tax evasion.

“Even as the principle is that domestic law would prevail wherever they are more beneficial to the taxpayer than the corresponding overseas laws, there is a need to plug the loopholes in DTAAs so that they are only to the extent of tax planning and not for tax evasion,” one official was quoted as explaining by the Financial Express.

It is expected that exchange of information provisions will be included in the soon-to-be re-negotiated tax agreements with Japan and Malaysia.

Furthermore, with the provisions of the DTAA between India and Mauritius up for review, it is also suggested that EoI provisions will soon be inserted into the clauses of this agreement.

If, however, the Free Trade Agreement between India and Mauritius being signed in Mauritius this week contains the existing DTAA, as was being said earlier in the week, it is hard to see how this will be achieved.

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