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India-Seychelles Tax Information Exchange Agreement (TIEA)

India and Seychelles signed a Tax Information Exchange Agreement (TIEA) on August 25, 2015, with the objective of facilitating the exchange of information related to taxes between the contracting countries. Unlike traditional Double Taxation Avoidance Agreements (DTAAs), which focus on avoiding double taxation, a TIEA primarily enables the exchange of tax-related information to enhance transparency and combat tax evasion. This agreement empowers the competent authorities of both nations to provide and receive information that is foreseeably relevant for the effective enforcement of their domestic tax laws.

Applicability of the TIEA

The TIEA applies to the following taxes in the contracting states:

  • In India: Taxes of every kind and description imposed by the Central Government or the Governments of political subdivisions or local authorities, irrespective of how they are levied.
  • In Seychelles: Taxes of every kind and description are imposed by the Government, irrespective of how they are levied.

Key Takeaways

  1. Exchange of Information upon Request: The TIEA enables the exchange of information based on formal requests from one state to the other. Information is exchanged without regard to whether the requesting party needs it for its own tax purposes or for conducting investigations related to criminal activities under its laws.
  2. Tax Examination Abroad: At the request of the competent authority of the requesting party, the requested party may allow representatives of the competent authority of the requesting party to be present during relevant parts of a tax examination conducted in the territory of the requested party.
  3. Possibility of Declining a Request for Information: The competent authority of the requested party may decline a request for assistance or information sharing if the request does not conform to the TIEA’s provisions or if the requesting party has not exhausted all available means in its territory to obtain the information.
  4. Confidentiality: Information received by a contracting state under the TIEA is treated as confidential and may only be disclosed to individuals or authorities within the jurisdiction of the concerned contracting state. The information can be used solely for the purposes of tax assessment, collection, enforcement, prosecution, or appeal determination related to the covered taxes.
  5. Costs: Unless otherwise agreed upon by the competent authorities of the contracting states, ordinary costs incurred in providing assistance are borne by the requested party, while extraordinary costs exceeding $500 are borne by the requesting party.

Inference

The India-Seychelles TIEA has brought significant benefits to both contracting states by promoting international cooperation in tax matters through the exchange of tax-related information. The agreement’s broad scope, encompassing all taxes imposed by the governments of India and Seychelles, has expanded the reach of these nations to identify and deter tax evasion practices by individuals and entities. Furthermore, the TIEA establishes a mutual agreement procedure to resolve disputes and establish the necessary procedures for implementing the agreed-upon provisions.

For comprehensive legal support related to the India-Seychelles Tax Information Exchange Agreement or any other international tax matters, please contact Chandrawat & Partners. Our team of legal experts specializes in international tax law and is committed to providing tailored legal solutions to meet your specific needs. We are dedicated to delivering high-quality legal services and ensuring your satisfaction. If you have any questions or require assistance with legal matters, please do not hesitate to reach out. We are here to provide professional and dedicated service.

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

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