Black money: Swiss automatic info exchange pact with India in works
With the Swiss government signing a landmark Automatic Exchange of Information (AEOI) agreement with the European Union (EU) last week, efforts are underway for a similar bilateral pact with India.business Updated: Jun 03, 2015 01:39 IST
With the Swiss government signing a landmark Automatic Exchange of Information (AEOI) agreement with the European Union (EU) last week, efforts are underway for a similar bilateral pact with India.
The effort, which is expected to provide a strong impetus to the Narendra Modi government’s pitch to combat the black money menace in India and abroad, was kick-started by an October 15, 2014, joint Indo-Swiss statement which said that Switzerland would commence talks with India in this regard at the earliest after completion of its domestic procedures.
“Those procedures are not completed yet,” Anne Césard, spokesperson from the Swiss state secretariat for international financial matters told HT. Asked about the broad parameters of a pact with India, the spokesperson said: “This would depend on the outcome of the talks and the terms of a possible agreement.”
The AEOI, which is meant to substantially cut down red tape and tax evasion possibilities, provides for the exchange of non-resident financial account information with the tax authorities in the account holders’ country of residence. In effect, AEOI signatories will send and receive pre-agreed information every year, without specific requests.
Asked if the AEOI pact would be a step towards Swiss banks shedding their long-held banking secrecy tag, Césard said: “Banking secrecy is not an obstacle to exchange of information on request, provided that conditions pertaining to mutual assistance in tax matters are met.”
Since 2009, Switzerland has committed itself to applying global standards on transparency. “Progress accomplished by Switzerland has been widely recognised in international fora (Global Forum on Tax Transparency) as well as on a bilateral basis (recent press declarations made by finance minister Arun Jaitley expressing his satisfaction with Swiss cooperation)” Césard said.
On Jaitley’s recent assertion that India will be able to get information in real time from 2017 onwards, Césard said: “We are not in a position to comment on statements of foreign governments.”
Swiss federal tax authorities are already facing a flood of requests from foreign governments for assistance in tax matters relating to money suspected of being stashed in Swiss banks.
In 2011, the year in which the service for information exchange was established in Switzerland, there were 370 enquiries. This increased seven-fold in 2014 with 2,791 requests.