Millennium Post
Business

Switzerland ‘ready to discuss tax info exchange with India’

Switzerland has also agreed to an OECD global automatic exchange of tax information framework, which would further enhance its information exchange mechanism with India after becoming operational, a Swiss government official said.

There have been concerns in India about limited flow of tax information from Switzerland about Indian citizens who have allegedly stashed away unaccounted money in Swiss banks.

Despite efforts by the Alpine nation to shed its banking secrecy tag, Switzerland is still perceived in some quarters to be a safe haven and to be reluctant in sharing information.

Seeking to dispel such perceptions, Switzerland's Federal Department of Finance said that it has intensified its efforts in the field of information exchange to explain Swiss laws and practice to the Indian authorities in a transparent way.

‘For doing so, a Swiss delegation is prepared to travel to New Delhi to discuss the current situation and, if need be, define measures for enhancing the collaboration in tax matters,’ a Swiss Federal Department of Finance spokesperson said.

‘For decades, Switzerland and India have maintained a good and amicable relationship which does not stop deepening and intensifying,’ the official added.

The Swiss finance ministry said that the requests for information are currently treated according to the treaty on the avoidance of double taxation based on international standards with India, which has been in force since 7 October, 2011.  However, the OECD tax convention that Switzerland signed last year on 15 October has not yet come into force. ‘Once it is in force, the information exchange between Switzerland and India will be further enhanced,’ the official said.

However, the ministry refused to divulge the number of requests made by India on tax issues, citing confidentiality.

‘Because of the principle of confidentiality given by the international standard in tax matters, the exact number of the current requests for tax information cannot be disclosed to the public,’ the spokesperson said.

As per the latest data available with the European nation's central bank, the Swiss National Bank, the total funds held by Indians in Swiss banks declined to to a record low of about Rs 9,000 crore (1.42 billion Swiss francs) at the end of 2012, as compared to around Rs 14,000 crore (2.18 billion Swiss francs) a year ago.

The overall funds held in Swiss banks by entities from across the world also fell from $1.65 trillion to $1.5 trillion during 2012.

Seen as a major step in cracking down on blackmoney menace, Swtizerland in October 2013 agreed to automatic exchange of tax information and mutual administrative assistance in tax matters with overseas jurisdictions.

This has made European nation a signatory to OECD's Multilateral Convention on Mutual Administrative Assistance in Tax Matters, to which India is also a signatory.

The convention, once operational, would require Switzerland to extending all kinds of mutual assistance in tax matters including exchange on request, spontaneous information sharing, tax examinations abroad, and assistance in tax collection.

Paris-based OECD (Organisation for Economic Cooperation and Development), sets the global tax standards and is the key player in international efforts to curb the menace of tax evasion and black money.

‘With the support of the G20, automatic exchange is becoming the new international standard, and Switzerland adheres to an instrument that will allow it, in due time, to join the jurisdictions that will decide to exchange financial information automatically,’ according to OECD.

The Swiss Federal Council, the highest policy making authority of the country, approved this Convention on 9 October, 2013.

On 16 October, Swiss government had said that revision of the Tax Administrative Assistance Act was necessary due to international developments in the area of taxation.

Switzerland in October had said that the issue of administrative assistance requests based on stolen data met with strong opposition during the consultation.

‘The Federal Council wished to break the deadlock whereby Switzerland is unable to respond to numerous requests due to a very restrictive practice in this area... However, those who participated in the consultation procedure rejected all changes of practice. Consequently, the Federal Council has decided not to include the planned provision,’ the statement had said.
Next Story
Share it