India has opened seven new Income Tax Overseas Units (ITOUs) in countries such as Germany, USA and France as part of its efforts to crack down on offshore tax avoidance and promote foreign investment.
Meantime, the Finance Ministry has appointed seven Indian Revenue Service (IRS) officers as first secretaries in Indian Embassies in France, Germany, Japan, Netherlands, UAE, UK and USA following the approval from the Prime Ministers office and the External Affairs Ministry, according to the news agency Press Trust of India (PTI).
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The government said that it has established ITOUs in these countries to fight against blackmoney and to streamline the flow of investments from these nations into India.
The increase in the numbers of ITOUs will allow these units to get clear information on tax and financial data of investments made by individuals and institutions in these countries and aid exchange of data on legal investment or routing of money in India and vice-versa.
The move follows positive results from two such ITOUs already set up in Mauritius and Singapore few years back.
In addition, a similar Income Tax office in Cyprus has not been operationalised as India has suspended the double tax treaty with Cyprus, which offered benefits to taxpayers conducting business between the two countries, saying that the country has broken its contract to provide information to India’s tax authorities.
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By GlobalData"Senior I-T officers have started functioning from these foreign offices after they were posted recently. However, the Cyprus ITOU has been kept vacant subject to the outcome of talks between the two countries," sources told PTI.
