India has signed an international tax treaty for getting information on black money stashed abroad. The country has become the latest signatory to the multilateral convention on mutual administrative assistance in Tax Matters.
The multilateral instrument is the single legal basis for multi-country cooperation, as against other treaties including the Double Taxation Avoidance Agreement, which are bilateral.
The convention not only facilitates the exchange of information, but also provides for assistance in the recovery of taxes. This will give a fillip to the efforts of the government in bringing money illegally stashed abroad.
By signing the convention, India and the other 31 signatories send a strong signal that countries are acting together to ensure that individuals and multinational enterprises pay the right amount of tax, at the right time and in the right place. Many more countries are expected to sign the convention in future.
