India and Switzerland signed Bank Information Sharing deal
The Swiss Federal Department of Finance said India meets in particular the high demands in terms of adherence to the principle of speciality and the safeguarding of confidentiality for the data delivered, which are prerequisites for the introduction of the AEOI.
India and Switzerland signed a Joint Declaration for implementation of Automatic Exchange of Information (AEOI) between the two countries. The declaration was signed in respect to accounts of Indians held abroad and vice versa. The deal was inked on 22 November 2016 in New Delhi.
With this, India had joined a list of select countries with which Switzerland will exchange all financial information automatically. It will be done on a reciprocal basis for tax purposes.
The Joint Declaration was inked by Chairman of Central Board of Direct Taxes Sushil Chandra and Deputy Chief of Mission of Swiss Embassy in India, Gilles Roduit.
Highlights of the Joint Declaration
• It will make possible for India to receive the financial information of accounts held by Indian residents in Switzerland for 2018 and subsequent years, on an automatic basis.
• The exchange will begin from September 2019.
• The data will be shared annually.
• As per the declaration, details about accounts held before 2018 will not be shared.
The Swiss Federal Department of Finance said that the automatic exchange of information with India will be done on the basis of the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information (MCAA). This MCAA is based on the international standard for the exchange of information that was developed by OECD.
This deal, if approved by the Swiss parliament, will help the Union Government in its fight against the menace of black money that is stashed in offshore accounts. Fight against the black money has been a key priority area for the government.
What helped India in achieving the deal?
The deal was achieved after India managed to convince the Swiss authorities that it will respect Switzerland’s tradition of banking secrecy. It will respect the confidentiality of account holders and use the data only for tax purposes. For the purposes, India has been lobbying hard to prevent its citizens from stashing undeclared funds in Swiss banks.
The Swiss Cabinet has authorised the Federal Department of Finance to initiate a consultation process on the inclusion of India and other countries in the AEOI partnership. After this consultation, the corresponding federal decrees will be submitted to the parliament for approval.