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India-Cayman Islands Tax Information Exchange Agreement (TIEA)

The Tax Information Exchange Agreement (TIEA) signed between the governments of India and the Cayman Islands on March 21, 2011, represents a significant step in the exchange of tax information between these two countries. The Cayman Islands, a well-known offshore tax haven, has been one of India’s top sources of foreign direct investment. In line with India’s efforts to combat black money and tax evasion, this agreement facilitates the sharing of tax-related information.

Applicability

The TIEA is comprehensive in its applicability, covering all types and descriptions of taxes that may be imposed on residents in each of the contracting states. Importantly, it also extends to cover any future taxes that may be imposed in these states.

Key Takeaways

Here are key takeaways from the India-Cayman Islands TIEA:

  1. Information Sharing: Information is shared between the two states upon the formal request of one state to the other. The requested state may allow representatives of the requesting state to interview individuals and examine records, subject to the prior written consent of the individuals or other relevant persons.
  2. Tax Examination: The requested party may allow representatives of the requesting state to be present during the relevant part of a tax examination.
  3. Cost Considerations: In cases where unusual expenses are expected to exceed 500 British Pounds, the relevant authorities will consult in advance to assess whether the requesting party will continue with the request and cover the associated costs.
  4. Insufficient Information: If the information in possession of a party is insufficient to comply with a request for information, that party is obligated to use all relevant information-gathering measures to provide the requested information.

Inference

The India-Cayman Islands TIEA establishes regulations for the efficient sharing of data and provides mechanisms for assistance in tax collection between the tax authorities of both countries, in accordance with internationally recognized standards. This agreement also includes provisions for the exchange of banking information and anti-abuse clauses to ensure that the agreement’s benefits are only accessible to genuine residents of both countries.

The TIEA offers fiscal stability to citizens of India and the Cayman Islands, promoting mutual economic cooperation and fostering increased investment, technology transfer, and service exchange between the two nations. It is a crucial tool in India’s efforts to combat tax evasion and promote transparency in international financial transactions.

Chandrawat & Partners specializes in international tax agreements and is well-equipped to provide expert legal guidance on the India-Cayman Islands Tax Information Exchange Agreement and related matters. For comprehensive legal assistance or advice regarding this agreement, please do not hesitate to contact us. We are committed to providing professional legal services and helping you navigate the complexities of international tax laws.

For further information or to seek our expertise on this agreement or other legal matters, please reach out to us. We are here to serve your legal needs with the utmost professionalism and diligence.

To know more about DTAA relations between India and Cayman Islands, please download our Guide.

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