Cabinet approves ratification of OECD's multilateral convention to check tax evasion
The Union Cabinet, headed by Prime Minister Narendra Modi approved the ratification of the convention.
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS) was signed by the then Finance Minister Arun Jaitley in Paris on June 7, 2017.
The Union Cabinet, headed by Prime Minister Narendra Modi, Wednesday approved the ratification of the convention.
"The Convention will modify India's treaties in order to curb revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxed where substantive economic activities generating the profits are carried out and where value is created," an official release said.
The Multilateral Convention is an outcome of the OECD/G20 Project to tackle Base Erosion and Profit Shifting (BEPS), which is resorted to by MNCs through tax planning strategies by exploiting gaps and mismatches in tax rules.
It helps them artificially shift profits to low or no-tax locations, resulting in little or no overall corporate tax being paid.
Post this convention, 90 countries have now implemented the automatic exchange of financial account and tax information.
The Convention enables all signatories to meet treaty-related minimum standards that were agreed as part of the BEPS package.
SEZ amendment bill to replace ordinance
The Cabinet also approved introduction of the Special Economic Zones (Amendment) Bill, 2019 in the ensuing session of Parliament.
The bill will replace Special Economic Zones (Amendment) Ordinance, 2019, which was promulgated in March. The ordinance had paved the way for trusts to set up units in special economic zones (SEZs).
"The Union Cabinet has approved to introduce a Bill, namely, the Special Economic Zones (Amendment) Bill, 2019, ... to replace the Special Economic Zones (Amendment) Ordinance, 2019. The Bill will be introduced in ensuing session of Parliament," an official release said.
After the amendment of sub-section (v) of section 2 of the Special Economic Zones Act, 2005, a trust or any entity notified by the central government will be eligible to be considered for grant of permission to set up a unit in SEZs, it added.
The amendment also seeks to provide flexibility to the central government to include 'trusts' in the definition of a 'person', in a bid to facilitate investments in SEZs.
Cybersecurity pact between India, Finland
The Cabinet cleared signing of an agreement between India and Finland to enhance cooperation in the area of cybersecurity.
"Cabinet approves signing of Memorandum of Understanding (MoU) between India and Finland in the area of cybersecurity," the government statement said.
The Cabinet was apprised of the MoU on the cooperation in the area of cybersecurity between India and Finland signed in January 2019.
"The MoU intends to promote closer cooperation for exchange of knowledge and experience in detection, resolution and prevention of security related incidents between India and Finland," the statement said.
India-Kyrgyzstan MoU on legal metrology
The Cabinet approved a memorandum of understanding (MoU) between India and Kyrgyzstan for mutual cooperation in the field of legal metrology, which will be signed on the sidelines of the Shanghai Cooperation Organisation (SCO) summit on June 13-14.
Under the proposed pact, the two nations will exchange information and documents relating to legal metrology, develop training programme for officials and non-officials dealing with the subject, an official statement said.
Seminars, workshops, meetings, and attachment learning programmes will be held in the area of mutual interest, as may be appropriate.
That part, the two countries will establish requirements for pre-packaged goods and carry out the state metrological supervision of pre-packaged goods as well as review the status of the rules/regulations on pre-packaged goods.
They will also share experience in carrying out of metrological supervision in mutual settlements between producers and consumers, the statement added.