India, Switzerland sign MoU on financial dialogue
India and Switzerland on Monday signed a Memorandum of Understanding on financial dialogue paving the way for the two countries to start exchanging tax-related information.world Updated: Oct 04, 2011 01:22 IST
India and Switzerland on Monday signed a Memorandum of Understanding on financial dialogue paving the way for the two countries to start exchanging tax-related information.
This agreement will help tax authorities to keep in regular touch, once the amended Indo-Swiss Double Taxation Avoidance Agreement kicks in on October 6th.
The memorandum, which was a highlight of President Pratibha Patil's visit to Switzerland, was signed by the Indian ambassador Chitra Narayan and Switzerland's secretary of state in the department of finance, Miachel Ambuhl.
The memorandum and the amended double taxation treaty will allow India to request the Swiss government for release of bank data to figure out the extent of Indian black money in Swiss banks.
While some estimates put the amount of Indian black money in Swiss banks at $1.4 trillion, Swiss authorities estimate it to be only $2 billion.
The Indo-Swiss treaty will focus both on tax fraud as well as tax evasion.
However, both governments know that the modalities of making a list of tax offenders and working out the money trail will be a Herculean task.
It is here that the memorandum will help by allowing regular meetings between tax authorities from both sides.
The treaty has come a long way from the June 2011 meeting of finance minister Pranab Mukherjee with the Swiss minister of economic affairs Johann N Schneider-Ammann, during which Bern had promised an early ratification of the treaty.