Joining MCAA: Implications for India

Joining MCAA: Implications for India

Question : India joined the Multilateral Competent Authority Agreement on Automatic Exchange/MCAA of Financial Account Information on 3rd June, 2015, in Paris, France recently. Discuss the implications of this.

India joined the MCAA along with other nations such as Costa Rica, New Zealand, Australia, Canada and Indonesia

• 94 countries including India have committed to exchange information an an automatic basis from the year 2017 as per international standards associated with automatic exchange of information

• These are the Common Reporting Standards on Automatic Exchange of Information

• The new global standards enable the treaty partners to exchange wide range of financial data once they have collected the information from financial institutions including the beneficial owners of entities and ultimate controlling persons

• Necessary legislative changes have been made to section 285BA of the Income tax Act for implementation of these standards

• Necessary guidelines are being formulated in consultation with financial institutions

• AEOI associated with CRS will enable India to receive information from every country in the world regarding black money assets being held abroad illegally

• It will also provide the Indian government with information on offshore financial centres as well as international tax evasion and avoidance

Facts and Stats

• Earlier, 51 countries/jurisdictions had joined the MCAA on 29th October, 2014 in Berlin
• Switzerland became the 52nd country to join the MCAA on 19th November, 2014. Ghana and Seychelles joined the MCAA on 14th May, 2015

• With six countries joining the MCAA on 3rd June, 2015, the total number of countries agreeing to exchange information automatically in accordance with MCAA has risen to 60.