G20 commits to automatic exchange of tax info by 2017

The G20 today decided to put in place a mechanism for automatic exchange of tax information between various countries by 2017. This development will help India in dealing with the menace of black money stashed abroad.The new framework would mark a significant forward movement from the current practice of information exchange mostly on the basis of requests or in the cases of suspected tax evasion or other financial crimes. The G20 in a communique said this system will tackle and deter cross-border tax evasion.

The new global standard, formulated by Paris-based Organisation for Economic Cooperation and Development in July, would be common for all countries. It would facilitate a systematic and periodic transmission of bulk taxpayer information by the source country of income to the country of residence of the taxpayer. India has been at the forefront in raising the issues concerning tax avoidance and automatic exchange of information with a view to curbing tax evasion. Minister of State for Finance Nirmala Sitharaman, RBI governor Raghuram Rajan and Finance Secretary Arvind Mayaram are representing India at the two day meeting Cairns.