In a yet another move to curb existence of black money, India is soon likely to get access to data of “undisclosed” real estate assets located overseas.
According to sources, “Finance minister Nirmala Sitharamkan, who is visiting Marrakech (Morocco), is also expected to deliberate on this matter asking countries to come together and begin automatic exchange of information with respect to undisclosed real estate parked abroad.”
India has been advocating the need to have access to this data with G20 countries post which the “G20 countries are working for an automatic exchange of data related to undisclosed “immovable properties” abroad beyond the current arrangement of sharing financial data,” sources in the know of the development added.
It is understood that once agreed upon, “the exchange of information on immovable assets parked abroad will further boost technology-driven compliance system of the income-tax authority,” sources said.
Already upon the initiative of India Presidency, the leaders of the G20 had agreed to cooperate towards “a globally fair, sustainable and modern” international tax system and adopted the OECD Report on Enhancing International Tax Transparency on Real Estate in their Delhi Declaration on September 9.
The OECD report proposed automatic exchange of such information among countries on a real-time basis.
The OECD report explored options to enhance international tax transparency on real estate, including the feasibility of exchange of tax information on a voluntary basis in respect of real estate held by taxpayers outside their jurisdiction of tax residence.
Based on an assessment of current state of global tax transparency, the report “lays out ideas for achieving both short-term solutions, as well as longer-term structural changes that interested jurisdictions could undertake to ensure their tax administrations receive tax-relevant information on real estate held abroad.”
The report “noted that increased visibility on cross-border transactions in the real estate sector has the potential to benefit not only tax administrations, but also regulatory, anti-money laundering and law enforcement authorities. Data gathered by the FATF indicates that across 32 FATF member countries, 69% identify the real estate sector as posing a significant risk for money laundering activities.”
“FATF has identified that many of the same techniques used in tax fraud (such as complex ownership structures to hide identities, as well as false or no declarations of relevant assets) are also used to launder funds. Hence, by applying a whole-ofgovernment approach, information collected by tax authorities could be used to combat other types of cross-border financial crimes in the real estate sector,” the report said.
Sitharaman is currently attending the annual meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF), along with G20 meetings. She will also hold bilateral meetings with Indonesia, Morocco, Brazil, Switzerland, Germany and France between October 11 and October 15 in Marrakech.