G20 commits to automatic exchange of tax information by 2017

Cairns: Committing to a global response to deal with cross border tax avoidance and evasion, the G20 on Sunday decided to put in place a mechanism for automatic exchange of tax information by 2017.

"We endorse the finalised global Common Reporting Standard for automatic exchange of tax information on a reciprocal basis which will provide a step-change in our ability to tackle and deter cross-border tax evasion.

"We will begin exchanging information automatically between each other and with other countries by 2017 or end-2018," said the communique released after the two-day G20 meeting of Finance Ministers and central bank governors.

India has been at the forefront of raising the issues concerning tax avoidance and automatic exchange of information with a view to curbing tax evasion.

India is being represented by Commerce Minister Nirmala Sitharaman, RBI Governor Raghuram Rajan and Finance Secretary Arvind Mayaram at the summit.

"We support further coordination and collaboration by our tax authorities on their compliance activities on entities and individuals involved in cross-border tax arrangements," it added.

The communique further said that the G20 leaders are strongly committed to a global response to cross-border tax avoidance and evasion so that the tax system supports growth-enhancing fiscal strategies and economic resilience.

It said that action plan to tackle Base Erosion and Profit Shifting (BEPS) to make sure companies pay their fair share of tax would be finalised in 2015.

"We will continue to take practical steps to assist developing countries preserve and grow their revenue bases and stand ready to help those that wish to participate in automatic information exchange. We are deepening developing country engagement in tackling BEPS issues and ensuring that their concerns are addressed," it added.

The BEPS initiative would ensure that tax is paid where profits are made.

The G20 ministerial meeting will be followed by a summit at Brisbane in November.

The G20 is a grouping of industrialised and developing countries. Its members are Australia, Argentina, Brazil, Britain, Canada, China, France, Germany, India, Italy, Japan, Mexico, South Korea, Russia, Saudi Arabia, South Africa, United States and European Union.