India signs multilateral pact on sharing tax information

India has entered into a multilateral convention on tax matters which until 2010 was available only for European nations and OECD members, a development that will boost the government's efforts to bring back money illegally stashed abroad.

The convention -- Mutual Administrative Assistance on Tax Matters -- provides for examination of tax affairs of the taxpayers simultaneously in their own territory and share the relevant information with each other, according to an official release.

The convention, which has 31 signatories, was earlier available for the members of the Organisation of Economic Cooperation and Development (OECD) and the Council of Europe. It was amended in 2010 to include others . "This (signing of the agreement) will give a fillip to the efforts of the Government in bringing the Indian money illegally stashed abroad," the statement said.

The Mutual Administrative Assistance on Tax Matters is based on international standard of transparency and exchange of information and not only facilitates the exchange of information, but also provides for assistance in the recovery of taxes, the release said. It is multilateral and a single legal basis for multi-country co-operation as against the Double Taxation Avoidance Agreements (DTAAs) and the Tax Information Exchange Agreements (TIEAs) which are bilateral.

The Mutual Administrative Assistance in Tax Matters also provides for an extensive network and wider forms of cooperation among the signatories on all taxes. It provides for simultaneous tax examinations and participation in tax examinations in other countries.