A pact to be signed with Liechtenstein in Europe for bilateral exchange of information on tax matters was today approved by the Union Cabinet amid its efforts to track black money stashed abroad.
India has been in negotiation with the European nation on Tax Information Exchange Agreement (TIEA) since 2009.
In March 2009, India was able to obtain information through the German government regarding Indian taxpayers having accounts with LGT Bank in Liechtenstein.
The G-20 summit in London in April 2009 proved to be an important milestone when just before the summit, countries such as Switzerland, Liechtenstein, Luxembourg, and Monaco announced their preparedness to accept OECD standards of transparency and exchange of information.
As per the international standard, tax information exchanged under DTAAs/TIEAs is protected by the confidentiality clause of the respective DTAA/TIEA under which information is received.
All the TIEAs signed by India have provisions for tax examination abroad. Most of the TIEAs signed by India also contain provision for obtaining past information either in all cases or at least in criminal cases.
India has been expanding its tax agreements with different countries and jurisdictions as part of the drive to crack down on the menace of black money and tax evasion.
