Switzerland’s age of banking secrecy is finally coming to an end. On Friday, Switzerland ratified automatic exchange of financial account information with India, marking another step in addressing the menace of black money stashed abroad.
With this move, India should be able to access transactions by Indians with Swiss banks after September 2019.
This is a big boost for Modi government’s move against black money. It will now be possible for India to receive from Septembember 2019.
This is a big boost for Modi government’s move against black money. It will now be possible for India to receive from September, 2019 onwards, the financial information of accounts held by Indian residents in Switzerland for 2018 and subsequent years, on an automatic basis.
The finance ministry, last year, had noted that that there is no official estimation regarding black money of Indians stacked in Swiss banks.
Today’s decision follows hectic parleys between India and Switzerland for introduction of the AEOI (Automatic Exchange of Information) on tax matters under the guidance of G20, OECDand other global organisations.
The council said the proposal to introduce AEOI withIndia and others “met with widespread approval from the interested parties who voiced their opinions in the consultations”.
“In concrete terms, the AEOI will be activated with eachindividual state or territory by means of a specific federaldecree within the framework of this dispatch,” it added.
The exchange of information itself will be carried outbased on the Multilateral Competent Authority Agreement (MCAA)on the Automatic Exchange of Financial Account Information, which is in turn based on the international standard for theexchange of information developed by the Organisation forEconomic Co-operation and Development (OECD).
The council said it will prepare a situation reportbefore the first exchange of data, which is planned for autumn2019.
“In the process, it will be checked whether the statesand territories concerned effectively meet the requirementsunder the standard, especially those concerningconfidentiality and data security.
“It is important for the Federal Council that a levelplaying field be created among states and that all majorfinancial centres, in particular, be included.
This year, Switzerland has introduced the AEOI with 38 states and territories, including all EU member states, and data will start to be including all EU member states, and data will start to be exchanged with them in 2018,” it added.
In the recent past, the government has taken several steps to effectively tackle the issue of black money, which include policy-level initiatives, more effective enforcement action on the ground, putting in place robust legislative and administrative frameworks, and integration of information and its mining through increasing use of information technology.
A new law – ‘The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015′ – has been enacted to specifically and effectively tackle the issue of black money stashed away abroad.
The government had also given a one-time three months’ compliance window under the new law wherein 648 declarations involving undisclosed foreign assets worth Rs 4,164 crore were made. The amount collected by way of tax and penalty in such cases was Rs 2,476 crore