In what would give New Delhi a handle in its avowed fight against black money stashed abroad by its citizens, India would start receiving information about its resident’s bank accounts in Switzerland automatically beginning 2018. This information exchange, felicitated by Swiss authorities easing stance on exchange of information based on the so-called stolen data, will be under a bilateral agreement. Both the countries will meet before mid-September to discuss the modalities for the reciprocal bilateral implementation of Automatic Exchange of Information. A final agreement is expected by end of by this year.
“Once signed, India will start receiving, possibly from 2018, info about Indian residents’ accounts in Switzerland on automatic basis. To begin with, Switzerland would facilitate expeditious resolution of pending information requests,” revenue secretary Hasmukh Adhia tweeted after signing a joint statement with Switzerland’s state secretary for international financial matters Jacques de Watteville here.
The development comes in wake of recent commitment by Prime Minister Naredra Modi to fight the menace of black money stashed in offshore accounts. On June 6, Modi met with the Swiss President Johann Schneider-Ammann at Geneva and discussed the need for expeditious exchange of information for combating tax evasion together with an early start to negotiations on the AEOI.
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Switzerland is now agreeable to extend assistance on tax matters to other countries provided such information was procured through normal administrative assistance channels or from public sources.
A team of officers from India would visit Switzerland for bilateral discussions towards expeditious resolution of pending exchange of information requests, said the joint statement signed by Adhia and Watteville. On the issue of requests based on what Switzerland considers as data obtained in breach of Swiss law, Adhia, while reaffirming India’s position that Switzerland should share information in all cases in accordance with its treaty obligations, noted the progress made in a number of Indian requests based on investigations carried out independently of the ‘stolen data.’
The issue of requests based on “stolen data” figured prominently in the talks and Revenue Secretary welcomed the decision of the Swiss Federal Council to amend the Tax Administrative Assistance Act in accordance with the OECD standard and provide administrative assistance in requests based on data obtained in breach of Swiss law. This is particularly significant in view of the recent challenges posed by the Panama Papers where voluminous information on offshore accounts has been placed in the public domain. The amended proposal is now with the Swiss Parliament. An early revision of the Swiss law in respect of stolen data would take the Indo-Swiss tax cooperation to a new level, the statement added.
Meanwhile, both India and Switzerland expect that the results achieved in the BEPS project should prevent the proliferation of uncoordinated unilateral defensive measures. In the context of transfer pricing and the resolution of cases of possible double taxation, the nations agreed that efficient and swift procedures are essential to foster cross-border economic exchanges.
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