India not to use ‘tax haven’ in black money info dossiers

Indian investigating agencies have been asked to shun the usage of the word "tax haven" while making legal overseas requests in black money cases as a number of foreign jurisdictions have taken exception to the term and called it offensive.

The Central Board of Direct Taxes (CBDT), the nodal authority in the Finance Ministry for executing tax information exchange between India and the globe in stash funds probe, has recently issued a directive in this regard.

Its Foreign Tax and Tax Research (FT and TR) wing has framed Exchange of Information (EoI) protocols and it processes treaties like Double Taxation Avoidance Agreements (DTAAs) and Tax Information Exchange Agreements (TIEAs) to execute such requests.

A recent CBDT communication said the taxman should refrain from using the word "tax haven" as a number of countries "have expressed their displeasure on use of such language (tax haven) and even declined to provide information in certain cases as the language used in the EoI request was found to be offensive". The expression "tax haven" is used to indicate a jurisdiction, country or territory where the rate of taxes are either negligible or extremely low and which have a strict mechanism for financial secrecy and client data protection.