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India signs tax avoidance agreement
Thursday 26 January 2012 - by Karina Whalley
India has added its signature to the Convention on Mutual Administrative Assistance in Tax Matters, an international agreement that aims to combat tax avoidance and evasion.
Another 31 countries have already signed the convention which was jointly created by the Council of Europe and the Organisation for Economic Co-operation and Development.
"India has moved very quickly since its commitment to the convention at the November G20 ceremony in Cannes [in 2011] and I expect it will be the first non-OECD G20 country for which the updated convention is in force," said Jeffrey Owens, director of the OECD centre for tax policy and administration.
The multilateral agreement was first developed in 1988 and promotes global cooperation while respecting taxpayer rights, says the OECD. It provides for administrative cooperation between the parties in the assessment and collection of taxes.
"By signing the convention, India ... [is] sending 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," the OECD said.
The agreement was recently updated to bring it into line with the global standard on exchange of information for tax purposes and to open it up to all countries. Previously it was only open to members of the OECD and the Council of Europe.