Switzerland Ready to Discuss Tax Info Exchange With India

There have been concerns in India about limited flow of tax information from Switzerland about 

Indian citizens. (AP)

By Express News Service - NEW DELHI

Published: 15th January 2014 06:00 AM

Last Updated: 15th January 2014 11:13 AM

Intensifying efforts to address Indian concerns over alleged stashing of illicit funds in Swiss banks, Switzerland will send a delegation to India to discuss the “current situation” and define measures for greater cooperation on tax mattersws.

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 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 October 7, 2011.

However, the OECD tax convention that Switzerland signed last year on October 15 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 Rs14,000 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 USD 1.65 trillion to USD 1.5 trillion during 2012.

India-Swiss tax pact won't cover past transactions

Source:BL Bureau::New Delhi, Aug. 31

Those hoping that the Government will be able to get details of secret bank accounts from Switzerland are in for disappointment.

The latest protocol amending the Double Taxation Avoidance Agreement (DTAA) between India and Switzerland says only prospective information can be shared, not past information. The protocol was signed on Monday. It will come into operation only after the Swiss side completes certain internal processes.
he protocol paves the way for sharing of banking information between the two sides to enable enforcement of domestic tax laws.


Under the existing DTAA, India was not able to obtain banking information from Switzerland.

“There is a specific provision for providing banking and ownership information. The new provision will be applicable only for prospective information and not for past information,” Mr Pranab Mukherjee, Finance Minister, told the Lok Sabha on Tuesday while making a statement on the protocol.

Mr Mukherjee said: “Please remember that this is an agreement between two sovereign countries. They are not subordinate to us. We shall have to agree (to) whatever concession we get.”

The Finance Minister turned down the BJP leader, Mr L.K. Advani's suggestion that the House take up today for discussion the details of the protocol and its implications. Mr Mukherjee, however, offered to discuss the matter in the next session, adding that it was important to have a discussion as this issue will come up before Parliament time and again.

The protocol will amend the Article on Exchange of Information to bring it in line with international standards. Under the new article, the information exchange is to be used only for tax purposes. However, it also provides for use of information for purposes allowed under the laws of both the countries and if the competent authority of the supplying State authorises such use. There is also a specific provision to ensure that information will be exchanged even if there is no domestic interest.

Currently, the income from international shipping is not covered under the DTAA. There will now be residence-based taxation for shipping income from international traffic.

Recognised pension fund or scheme will also be able to get the benefit of India-Swiss DTAA.

krsrivats@thehindu.co.in