Switzerland agrees to share bank account info with India
India and Switzerland will start exchanging financial account information starting 2019, with the Swiss government formally ratifying the global convention for information exchange on tax matters with 38 countries on Friday. Notably, one of the key poll promises of the Narendra Modi government was flushing out black money, much of which is believed to be stored in Swiss banks.
Switzerland on Friday ratified automatic exchange of financial account information with India and 40 other jurisdictions to facilitate immediate sharing of details about suspected black money, even as it sought strict adherence to confidentiality and data security.Adopting the dispatch on introduction of the AEOI, a global convention for automatic information exchange on tax matters, the Swiss Federal Council said the implementation is planned for 2018 and the first set of data should be exchanged in 2019.The council, which is the top governing body of the European nation, will soon notify the Indian government about the exact date from which the automatic exchange would begin.NO FURTHER PROCEDURAL DELAYAs per the draft notification approved by the council in its meeting on Friday, the decision is not subject to any referendum -- which means there should be no further procedural delay in its implementation.The issue of black money has been a matter of great debate in India and Switzerland has been long perceived as one of the safest havens for the illicit wealth allegedly stashed abroad by Indians.Friday'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, OECD and other global organisations.HUGE APPROVAL FOR PROPOSAL TO INTRODUCE AEOI WITH INDIAThe council said the proposal to introduce AEOI with India 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 each individual state or territory by means of a specific federal decree within the framework of this dispatch," it added.The exchange of information itself will be carried out based 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 the exchange of information developed by the Organisation for Economic Co-operation and Development (OECD).The council said it will prepare a situation report before the first exchange of data, which is planned for autumn 2019."In the process, it will be checked whether the states and territories concerned effectively meet the requirements under the standard, especially those concerning confidentiality and data security."It is important for the Federal Council that a level playing field be created among states and that all major financial 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 exchanged with them in 2018," it added.