Black money: India, Switzerland expect auto info exchange by 2018

Experts of both the countries will meet by mid-September 2016 to further discuss the modalities for the reciprocal bilateral implementation of AEOI between India and Switzerland with a view to reaching an agreement at the earliest, possibly by the end of the year

Seeking to enhance cooperation to fight the black money menace, India and Switzerland, on Wednesday, said a team would soon visit the Alpine nation to expedite pending information requests on Indians with Swiss bank accounts, while an automatic exchange of details would begin in 2018.

Following up on the meeting between Prime Minister Narendra Modi and Swiss President Johann Schneider-Ammann in Geneva on June 6, a high-level delegation from Switzerland today met top finance ministry officials here to discuss wide ranging bilateral and multilateral tax and financial issues.

In his meetings with revenue secretary Hasmukh Adhia and economic affairs secretary Shaktikanta Das, Swiss state secretary for International Financial Matters, Jacques de Watteville also said that "Switzerland now has the necessary legal bases to begin with the implementation of automatic exchange of information (AEOI)" and a bilateral agreement can be reached by the end of this year.

"Once this agreement is signed, it will be possible for India to receive from 2018 financial information of accounts held by Indian residents in Switzerland on automatic basis," a finance ministry statement said, while adding "fighting the menace of black money stashed in offshore accounts has been a key priority for the government".

Experts of both the countries will meet by mid-September 2016 to further discuss the modalities for the reciprocal bilateral implementation of AEOI between India and Switzerland with a view to reaching an agreement at the earliest, possibly by the end of the year.

In a joint statement after the meeting, the two sides said they agreed that regular contacts "facilitate a common understanding of each other's concerns so as to ensure that the requests are dealt with quickly and efficiently.

"To begin with, a team of officers from India would visit Switzerland for bilateral discussions towards expeditious resolution of pending exchange of information requests."

On requests based on what Switzerland considers as data obtained in breach of Swiss law, Adhia reaffirmed India's position that Switzerland should share information in all cases in accordance with the treaty and "noted the progress made in a number of Indian requests based on investigations carried out independently of the 'stolen data'."

Later, Adhia said in a tweet: "To begin with, Switzerland would facilitate expeditious resolution of pending information requests.”

The need for expeditious implementation of automatic exchange of information was discussed at the meeting between Modi and the Swiss President in Geneva.

Adhia also 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.

"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 joint statement said.

The discussion on stolen data was significant in view of India stepping up its efforts to trace details of Indians having offshore accounts that came to be known after the so-called leaked HBSC List.

Besides, today's meeting assumes significance in the wake of the recent publication of leaked 'Panama Papers' where voluminous information on offshore accounts has been placed in the public domain, including of hundreds of Indians.

It also follows up on the visit of a high-level Indian delegation, led by Das, which State Secretary Jacques de Watteville received in Swiss capital Bern in October 2014.

The joint statement after today's meetings said that the "discussions showed a convergence of views with regard to tackling offshore tax evasion".

It further said that a timely revision of the Swiss law in respect of stolen data would take the Indo-Swiss tax cooperation to a new level.

Reiterating their countries' commitment to combat tax fraud and evasion within the applicable legal framework, both Adhia and de Watteville expect that the progress made by Switzerland in the field of administrative assistance in tax matters would be appropriately reflected in Switzerland's Phase-2 review by the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum).

Both the countries acknowledged the work of the Global Forum towards establishing a genuine worldwide level playing field for tax transparency.

They also recognised the need to take firm collective action on improving basic, legal and beneficial ownership information of legal persons and legal arrangements, while underlining the importance of full implementation of FATF standards in this regard, the statement said.

Photograph: Reuters