India, US pledge increased cooperation to crack down on tax evasion
New Delhi: India and the US will work together to ensure that information under the latter’s Foreign Account Tax Compliance Act, or FATCA, is fully reciprocal.
Under FATCA, which came into effect last year, Indian financial institutions are mandated to report accounts maintained by US taxpayers to the US government. But so far there has been no reciprocity that would have helped India access such information about its taxpayers.
Finance minister Arun Jaitley, who is in Washington to attend the spring meetings of the International Monetary Fund and World Bank, met US treasury secretary Jacob Lew on Thursday as part of the sixth annual US-India economic and financial partnership.
A joint statement released by both sides after the meeting stressed the need for increased tax cooperation to crack down on tax evasion.
“The two sides will continue to engage in discussions on full reciprocal arrangement on FATCA. We look forward to increased cooperation in sharing of cross-border tax information,” it said.
The statement pointed out that tax authorities on both sides had reduced bilateral tax disputes in the last one year besides accepting bilateral Advance Pricing Agreement applications by companies in both jurisdictions as part of efforts to reduce transfer pricing disputes.