Germany says secrecy must be respected on tax information

NEW DELHI: Germany today made it clear that secrecy must be respected on information exchanged between countries on tax matters.

"We have a secrecy of information on taxation only for tax administration. For taxation, there is no secrecy.... Therefore, if we exchange information between the administrations it must be granted that the secrecy on this information is respected," German Finance Minister Wolfgang Schauble said at a FICCI conference on globalisation.

He was asked about the the double taxation avoidance agreement ( DTAA) entered into between India and Germany in 1995 which was blamed as a constraining factor in disclosure of details of black money stashed overseas.

The DTAA between the two countries lays down that the identity of a person having an account in foreign bank can be disclosed only after charges have been filed against him in a court.

Schauble said that recently at a Global Forum in Berlin 51 countries, including the UK, had agreed on automatic exchange of information between financial institutions, on revenue and capital by signing automatic exchange of information.

"In this time of globalised market, the old instrument of bank secrecy cannot survive. ....(given) flexibility of capital in the global market, you will need exchange of information. Otherwise you can never get fair taxation system," he said.

Finance Minister Arun Jaitley had blamed the tax treaty entered into by the Congress government with Germany in 1995 as a constraining factor in disclosing details of black money stashed in foreign banks.