Offshore properties may face scrutiny
NEW DELHI : Real estate assets hidden abroad may come under scrutiny after a global framework of real-time data sharing by national authorities takes effect, marking the next frontier in governments’ efforts to combat tax evasion and money laundering. The Organisation for Economic Cooperation and Development’s (OECD) report to the leaders of G20 nations at the New Delhi summit has made proposals with far-reaching implications for tax compliance related to overseas property holdings.
The recommendations were made at the request of the Indian presidency. OECD cautioned that cross-border real estate holdings have risen, and proposed short- and long-term models for tax transparency on such assets held abroad.
One of the models is the traditional data-sharing approach. OECD also called for a second “more novel direct access-based model".
It is based on the “interconnection of digitalized ownership registers accessible to designated relevant government agencies on a real-time basis." It would be based on digital infrastructure that seamlessly interconnects national registers and would include a single query portal. The framework has to have modalities for giving access to specified agencies, define the purpose of access, specify confidentiality requirements, and an international legal instrument or treaty defining the “modalities for interconnecting and accessing the registers in a cross-border setting," the OECD report explained.
Once put into effect, this framework would take the global system of information sharing, which currently focuses more on financial holdings, to the next level. Experts believe the OECD partly attributes the shift in investor preference from financial assets to real estate over the last decade to the
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