India-UK commit to jointly deal with tax evasion menace

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India and the UK today expressed the determination to work together to tackle the menace of tax evasion even as Britain agreed to support infrastructure projects in the country.

UK Export Finance will provide a line of credit of one billion pounds (about Rs 10,000 crore) for the development of Bengaluru-Mumbai Economic Corridor (BMEC), said a joint statement issued today after a meeting between Finance Minister Arun Jaitley and UK Chancellor of Exchequer George Osborne.

"UK and India remain committed to the Base Erosion and Profit Shifting project and will continue to work together through the G20 and OECD to reform the international tax rules to ensure that they are fair and consistent," it said.

In order to deal with problem of tax evasion, the two countries resolved to begin automatic exchange of tax information from 2017 as part of their commitment to early adoption of the new Global Standard.

The two Ministers also called upon the other G20 countries and international financial centres to adopt the global standard for automatic exchange of tax information.

"We reiterated our commitment to preventing the misuse of legal persons and legal arrangements, and will continue to support the G20 leading by example, through effective implementation of the Financial Action Task Force (FATF) standards on beneficial ownership," it added.

Later talking to reporters, Osborne said: "We talked about strengthening the British-India economic relationships. The purpose is to create jobs and investments in both the countries. There is a lot of excitement about the new government in India and Britain".

Referring to the investment issues, both the countries resolved to explore ways to encourage increased institutional investment in infrastructure.

The joint statement said that besides one billion pound of line of credit for the BMEC project, an additional support of 3 billion pounds is also likely.

"10 global banks are in discussions with UKEF to deliver government funded loans through the 3 billion pounds Direct Lending Scheme, with more banks expected to join them in the coming weeks. This will provide competitive finance to purchasers of UK exports in India," the statement said.

The two sides also resolved to further collaborate on launching UK-India Financial Partnership, a strategic partnership to establish closer ties between London and Mumbai as financial centres.

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