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January 3, 2014

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India Reviewing U.S. Government Activities in the Country for Possible Tax Evasion

Earlier this month, Deputy Consul General Devyani Khobragade was arrested, detained, strip-searched, and had her passport confiscated because of charges that she had lied on a visa application and was paying a house worker below minimum wage. What was a cordial and improving relationship between the United States and India has quickly turned sour. Now, India is reviewing U.S. government activities in the country to see whether possible tax evasion is occurring.

On top of revoking many privileges that American officials enjoyed in the country, the Indian government is now seeking information from American schools operating in the country to see whether the domestic workers had permission to work there and whether they were taxed properly. The American embassy has not commented and it is uncertain what will happen. Nevertheless, tax consequences are of utmost importance even on an international basis between countries’ diplomatic officials. A tax mistake on the part of one diplomat could cause bilateral ties to crumble.

Tags: India, international tax evasion, international tax law

Offshore Accounts/International Tax Disputes