Eight overseas Income Tax offices to open soon

Locations: USA, UK, Netherlands, Cyprus, Germany, France, Japan and UAE

PTI | January 6, 2011



Government will operationalise eight overseas Income Tax offices in countries like the US, the UK and the UAE soon to obtain classified financial data and the officers who will man these units will be chosen by this month-end.

The I-T overseas units will begin functioning in less than two months in United States of America (USA), United Kingdom (UK), Netherlands, Cyprus, Germany, France, Japan and United Arab Emirates (UAE) as Finance Minister Pranab Mukherjee has approved the posting policy of the officials who will be appointed by January-end, sources familiar with the development said.

The minister has asked the Central Board of Direct Taxes (CBDT) to expedite the process, they said.

The I-T officers will be designated as First Secretaries at the Indian Mission or Embassy at these foreign locations.

Two such units are already functional at Mauritius and Singapore.

The overseas units are aimed at obtaining seamless flow of information on tax and financial data of investments made by individuals and institutions in these countries and facilitate any data on investment or routing of money in the country and vice-versa.

This information is needed during investigations in cases of tax evasion and ensuring tax compliance under the provisions of the Double Taxation Avoidance Agreement (DTAA) and other tax treaties to facilitate exchange of financial information with these countries, they said.

The Finance Ministry has made it an essential criteria that any senior I-T officer who will be posted in these units should have had a stint in the foreign taxation wing of the CBDT, international taxation and transfer pricing unit of the I-T department and also at the investigation wing.

The ministry has also mandated that the last five Annual Performance Appraisal Reports (APARs) of such an officer should be evaluated as either "outstanding" or "very good".

The shortlisted officers will also be interviewed by a panel headed by the CBDT Chairman and including other members of the board and Joint Secretaries in the Finance Ministry.

"The experience of actual work (by an aspiring officer to be posted at these units) of exchange of information, Mutual Agreement Procedure, tax treaty negotiation would be given more preference.

"After obtaining the approval of the Finance Minister (on the finalised officers), the panel shall be forwarded to Ministry of External Affairs for their concurrence followed by reference to Appointments Committee of Cabinet for final approval," a Finance Ministry notification said in this regard.

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