According to a Reuters article dated Wednesday, July 8, 2015, India and the United States are expected to sign a a tax information sharing agreement today, July 9, 2015, “under a new U.S. law meant to combat offshore tax dodging by Americans.”
Excerpts from the article can be found below:
“By signing the agreement, India hopes to garner Washington’s support for its own efforts to bring back illicit funds stashed by Indians in foreign tax havens and boost revenues.
Last year, Prime Minister Narendra Modi joined leaders of G20 countries in Australia in agreeing to countries automatically exchanging tax information on a reciprocal basis by the end of 2018.
Under the agreement, banks, mutual funds, insurance, pension and stock-broking firms will report their American client details to the tax department for sharing with the U.S., said a finance ministry official, who declined to be named.
Investors will have to provide correct information about their tax residency and financial assets that would be shared with U.S. tax authorities, he said.
The agreement could result in a fall in investments from small U.S investors into India’s equity and debt markets for some time, but would help putting a fear of punishment among tax evaders, said another official.”
So far, the U.S. has signed agreements with more than 80 foreign governments to implement FATCA (Foreign Account Tax Compliance Act). FATCA requires foreign financial institutions to exchange information with the U.S. government about U.S. accountholders who carry balances that exceed $ 50,000 (USD) at any point during the tax year. Stay tuned!