Topic: India and its neighborhood- relations.
5) What do understand by tax information exchange agreement (TIEA) that was recently signed with Marshall Islands? Discuss in detail its features along with its significance. (250 words)
Why this question:
Recently India notified a tax information exchange agreement (TIEA) with the Marshall Islands.
Demand of the question:
This question seeks to examine the key features of TIEA, its significance for India and other countries involved.
Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.
Structure of the answer:
Start with brief introduction on what is TIEA.
- The TIEA is based on international standards of tax transparency and exchange of information and enables sharing of information on request.
- What are its key features? – The agreement enables bilateral sharing of information, including banking and ownership information for tax purposes. It also allows officials of one country to undertake tax examinations in the other.
- The agreement between the two countries provides an effective framework for exchange of information on tax matters which will help curb tax evasion and tax avoidance.
- Recent agreement: The TIEA for exchange of information with respect to taxes was signed in 2016 at Majuro, the Capital of the Marshall Islands. India notified the TIEA on May 21, 2019.
Conclude with significance of such efforts.