India and the US have agreed to enhance collaboration on tackling offshore tax evasion and increase cooperation in sharing of cross-border tax information.
“We are committed to continued collaboration and sharing of experience in tackling offshore tax evasion and avoidance, including joint tax audits and tax examination abroad,” Union Finance Minister Arun Jaitley and US Treasury Secretary Jacob Lew said in a joint statement on Thursday.
The statement was issued after Jaitley and Lew co-chaired the 6th US-India Economic and Financial Partnership (EFP) here on the sidelines of the annual Spring Meeting of the International Monetary Fund and the World Bank.
“We look forward to the Competent Authorities of the two countries engaging in bilateral dialogue to move forward cooperation in these areas,” it said, adding the two nations “resolved” a significant portion of bilateral tax disputes.
Jaitley and Lew were joined by other senior officials from both sides including Federal Reserve Chair Janet Yellen and Reserve Bank of India Governor Raghuram Rajan.
During the meeting, Lew is believed to have appreciated Jaitley’s effort to successfully resolve more than half of the concerns related to tax disputes.
“Over the past year, our tax authorities resolved a significant portion of bilateral tax disputes between the United States and India,” the statement stated.
“Our governments have begun to accept bilateral Advance Pricing Agreement applications by companies in both jurisdictions in an effort to enhance cross-border business processes and strengthen our commercial ties,” it said.
Noting the progress in sharing of financial information between the two countries under the Inter-Governmental Agreement pursuant to Foreign Account Tax Compliance Act (FATCA), the statement said India and the US will continue to engage in discussions on full reciprocal arrangement on FATCA.
“We look forward to increase cooperation in sharing of cross-border tax-information,” it said.
Acknowledging that enhanced cooperation in tackling money laundering and combating financing of terrorism through increased information sharing and cooperation, the two leaders agreed on the importance of fighting illicit finance in all forms as an important means of tackling global terrorism.
The US-India Financial Regulatory Dialogue has brought together the financial regulators on both sides to discuss a range of issues pertinent to their financial sectors and to financial stability, the statement said.
Expert staff from Treasury and the Ministry of Finance are having consultations on the US experience and international perspectives on the regulatory design for India’s recently launched payment banks, it added.