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India may restart talks with Panama to dig up black money

After Panama Papers leak, India may begin talks with the Central American country again

Policy Pulse
Publish Date: Apr 9 2016 12:47PM | Updated Date: Apr 9 2016 12:47PM

India may restart talks with Panama to dig up black money

After Panama Papers leak, India may begin talks with the Central American country again on a Tax Information Exchange Agreement (TIEA) to uncover information on wealth hidden away from public scrutiny, a report in ‘The Economic Times’ has said.

 
Talks with Panama on such deal aimed at information exchange on tax offenders, have been delayed since 2013.
 
Panama Papers, which were released earlier this week, contained details of nearly 500 Indians, including celebrities and industrialists who had allegedly set up offshore entities in various tax havens. 
 
Leaked data came from Mossack Fonseca, a Panamanian law firm that helped set up offshore companies. 
 
India can also name Panama a 'non-cooperative jurisdiction' if it doesn't reach agreement in the matter, report quoted officials said. 
 
Result of such a classification is that India can levy a higher withholding tax of 30 percent on all payments made and permit no deductions of expenditure and allowances while calculating tax in respect of transactions with any entity from that country. 
 
India has y exercised this option in the case of Cyprus already. Most accounts that have been reported as part of the Panama Papers are connected to entities in jurisdictions with which India has accords, the British Virgin Islands for instance. 
 
India also plans to use exchange deals with these jurisdictions to get info on these entities besides using global fora such as the Financial Action Task Force.