Tax Information Exchange Agreement (TIEA)
- Based on international standard of transparency and exchange of information, information must be foreseeably relevant to the administration and enforcement of the domestic laws of the Contracting Parties concerning taxes covered by the agreement.
- Also provides for tax examination abroad and has specific provisions for providing banking and ownership information.
- The requesting state has to provide some minimum details about the information requested in order to justify the foreseeably relevance criteria which is to be treated as secret.
Sovereign Wealth Fund - SWF
- Pools of money derived from a country's reserves, which are set aside for investment purposes that will benefit the country's economy and citizens.
- The funding for a sovereign wealth fund (SWF) comes from central bank reserves that accumulate as a result of budget and trade surpluses, and even from revenue generated from the exports of natural resources.
- Your country holds several billion dollars in forex reserves. Normally, these would just lie there, growing at a paltry interest rate. SWFs are a way to improve the country’s finances as well as hedge against future crises.
- Sovereign wealth funds are usually created out of huge current account surpluses – where a country has more dollars that it can spend by exporting more than importing over a sustained period of time. This is why China has several sovereign wealth funds. Norway, which obtained a bonanza from the discovery of North Sea oil, created a fund to invest this unexpected wealth for meeting the needs of future generations.
- Now consider India’s case. This year we will run a current account deficit (CAD) of nearly 5 percent of GDP – even worse than in 1991.Since we dont have surplus hence not a good idea for India to have this type of fund
