New Delhi/Paris: In a major development in the fight against black money, multilateral grouping OECD on Monday unveiled a ‘single global standard’ for automatic exchange of financial account information by various countries including India and Switzerland.
The new framework, to be presented before a meeting of G-20 finance ministers in September, would mark a significant forward movement from the current practice of information exchange mostly on the basis of requests and only in the cases of suspected tax evasion or other financial crimes.
The new global standard, which would be common for all countries, would facilitate a “systematic and periodic transmission of bulk taxpayer information by the source country of income to the country of residence of the taxpayer concerning various categories of income or asset information”.
To enable automatic exchange of information on an annual basis, the financial institutions, including banks, brokers and fund houses, would have to mandatorily collect necessary details from their clients and submit the same to their respective regulators.
Paris-based Organisation for Economic Cooperation and Development (OECD) said that such an automatic exchange of information would “help detect cases of non-compliance even where tax administrations have had no previous indications of non-compliance”, besides providing timely information on non-compliance where tax has been evaded.
