India may take up setting up of ITOU in UAE during Narendra Modi's visit
New Delhi: The pending issue of setting upIncome Tax Overseas Unit (ITOU) at UAE may be taken up during Prime Minister Narendra Modi's visit to the gulf nation on August 16-17. ITOU is expected help track and curb black money and illegal funds stashed abroad and the issue may be taken up during the two-day visit of the Prime Minister, sources said. The unit has not yet opened in UAE as the government there has not given its clearance, whereas other ITOUs are already in operation in USA, France, Holland, UK, Japan in addition to Singapore and Mauritius, sources said. Black money is top of the government agenda and proposed ITOU in Abu Dhabi is expected to help in getting information related to illegal funds.
UAE is one of the places where flow of illegal money takes place through hawala transactions and it is one of the tax havens because of its zero tax rate except on petroleum and gas, sources added. The operationalisation of ITOU would help tax authorities track such transactions and put a check on such funds The unit would also obtain information on tax and financial data of investments made by individuals and institutions in these countries and facilitate any data on investment or routing of money in the country and vice-versa. UAE is one of the important countries from where huge remittance flow into the country as 2 million Indians working there.
During 2014-15, the bilateral trade between India and UAE stood at USD 59.04 billion. Between April 2000 and May 2015, USD 3.09 billion has come from UAE. A number of UAE companies have invested in India including Etihad Airways and Emaar MGF.