Govt Identifies 9 New Territories for Tax Avoidance Agreements
The Central Government have approved notification of the following areas as specified territory for the purpose of Explanation 2 to Section 90 of the Income Tax Act 1961 (i) Bermuda, (ii) British Virgin Islands, (iii) Cayman Islands, (iv) Gibraltar, (all British Overseas Territories); (v) Guernsey, (vi) Isle of Man, (vii) Jersey, (all British Crown Dependencies); (viii) Netherlands Antilles (an Autonomous Part of the Kingdom of Netherlands); and (ix) Macau (a Special Administrative Region of the Peoples Republic of China).
The Central Government can, now, initiate and negotiate agreements for exchange of information for the prevention of evasion or avoidance of income tax and assistance in collection of income tax with these nine specified territories.
The notification of Hong Kong, a Special Administrative Region of the Peoples Republic of China, as a specified territory for the purpose of Section 90 of the Income Tax Act 1961 is also under process.
Section 90 of the Income Tax Act was amended by the Finance Act 2009 to enable the Central Government to enter into an agreement with any specified territory outside India, in addition to the already existing provision of agreement with the government of any country. Explanation 2 provides for notification of such specified territories.