Unauthorized Maintenance of Foreign Bank Account - Double Taxation Avoidance Agreements to be Renegotiated
IMMEDIATE appropriate action is taken by the Directorate of Enforcement under the Foreign Exchange Management Act, 1999, whenever any specific case of unauthorized maintenance of foreign bank account or retention of funds in foreign banks by any person resident in India comes to its notice.
Government has proposed to review the India-Mauritius Double Taxation Avoidance Convention (DTAC) to incorporate appropriate changes in the DTAC for prevention of treaty shopping and to strengthen the mechanism for exchange of information on tax matter between India and Mauritius. For this purpose a Joint Working Group (JWG) comprising members from the Government of India and the Government of Mauritius was constituted in 2006 to inter-alia put in place adequate safeguards to prevent misuse of the India-Mauritius DTAC. Since then, JWG has had six rounds of meetings. Consistent efforts are being made by the Indian Government to find mutually acceptable solutions for addressing India's concerns.
India does not have a DTAA with Cayman Islands. India has taken steps to conclude a Tax Information Exchange Agreement (TIEA) in line with international standards, with Cayman Islands as India does not want to enter into DTAA with Cayman Islands.
This information was given by the Minister of State for Finance, S.S.Palanimanickam in a written reply to an Un-starred Question raised in Rajya Sabha yesterday.