Automatic Exchange of Information (AEOI) Framework for Financial Assets
Recently India wants non-financial assets to be included in OECD’s “Automatic Exchange of Information (AEOI) Framework”.
- Currently, the AEOI Framework of the Organization for Economic Co-operation and Development (OECD) provides for the sharing of details of financial accounts between signatory countries. Its purpose is to control tax evasion.
- India is pushing for inclusion of non-financial assets like real estate under the automatic exchange of information among OECD countries.
- Under AEOI, the systematic and periodic collection of comprehensive information on taxpayers by the source country is shared with the country of residence of the taxpayer. This information is automatically shared without any request from the country of residence.
- Exchange of information by AEOI is permitted under the provisions of Double Taxation Avoidance Agreements (DTAAs) and Multilateral Conventions (MAAC).
- This exchange of information is done under the Common Reporting Standard (CRS) of OECD.
Other global initiatives launched to prevent tax evasion –
- Global Forum on Transparency and Exchange of Information for Tax Purposes has been established. India is also its member.
- The Inclusive Framework on Base Erosion and Profits Shifting (BEPS) has introduced the requirement of ‘country-by-country’ reporting filings. India has also agreed to this framework.
- The Addis Ababa Action Agenda has been adopted to combat tax-evasion and tax-evasion.
- There is a Convention on Mutual Administrative Assistance in Tax Matters. India is also a signatory to it.
- OECD has come up with a two-pillar solution to deal with the tax challenges arising from the digitization of the economy. India is also a part of it.
Organization for Economic Co-operation and Development -OECD)
- The OECD originated in 1948 as the Organization for European Economic Co-operation (OEEC), established after the two world wars to implement continental reconstruction, particularly the US-funded Marshall Plan.
- When the United States and Canada joined in 1961, the OEEC was renamed the OECD to reflect the wider membership range.
- The Organization for Economic Co-operation and Development is an intergovernmental organization with 38 member states, founded in 1961 to encourage economic progress and world trade.
- The headquarter of OECD is in Paris, France. India is not a member of OECD.
Source – The Hindu
