Secrecy must be respected in tax information exchange: Germany

The thrust of the Indian government’s economic policy is encouraging, particularly the tax reform of proposed introduction of goods and services tax.

NEW DELHI, JAN 20:

Germany has made a case for ‘respecting the secrecy’ of any information shared with India for tax administration purposes.

This stance assumes significance given the raging debate in India following the Supreme Court (hearing on black money) raising issue over the confidentiality clause in such pacts entered into by India. The existing double taxation avoidance agreement (DTAA) between India and Germany has a confidentiality clause.

The Indian government had recently faced a lot of pressure from civil society over the need to make public the names of those Indians who had stashed unaccounted money abroad. There was clamour to reveal the information received on this count from foreign jurisdictions under the existing double taxation avoidance pacts. .

However, the government remained steadfast in its resolve to keep the information under wraps.

“If we exchange information for tax administration, we must respect the secrecy of it,” Wolfgang Schauble, Germany’s Finance Minister, said in response to a query at a meeting organised by the Federation of Indian Chambers of Commerce and Industry here on Tuesday.

Banking secrecy

Schauble also said the instrument of “banking secrecy’ cannot survive in the current times of globalised world. Given the flexibility in capital flows, there is need for exchange of information for a fair taxation system, he added.

Euro Zone woes

On financial issues, the problem of lack of confidence (in Euro Zone) suffered in the last couple of years has been overcome, Schauble said, adding that stability has returned to the financial markets.

Hannover Fair

In his address at FICCI, Schauble said the upcoming industrial trade fair in Hannover would be an ideal opportunity for India — as an official partner country — to demonstrate the full potential of the ‘Make in India’ initiative.

He said the thrust of the Indian government’s economic policy is encouraging, particularly the tax reform of proposed introduction of goods and services tax.

Schauble later had a bilateral meeting with the Finance Minister Arun Jaitley.