India and Switzerland Signed the Revised Double Taxation Avoidance Agreement
India and Switzerland signed the protocol amending the existing Double Taxation Avoidance Agreement on 30th August 2010 at New Delhi.
India and Switzerland signed the protocol amending the existing Double Taxation Avoidance Agreement on 30th August 2010 at New Delhi. The revised Double Taxation Agreement will help the Indian government to get information on illegal money stored by Indians in Swiss banks. The revised agreement also has provisions on the exchange of information in accordance with the OECD (Organisation for Economic Cooperation and Development) standard, which were negotiated in line with the parameters decided by the Swiss Federal Council. The Agreement was signed in presence of Indian finance minister Pranav Mukherjee and Foreign minister of Switzerland Micheline Calmy-Rey.
The black money or illegal money has become a major political issue in India because many rich Indians deposit their money with Swiss banks to evade taxation from the Indian government. The money stored with Swiss banks is worth of billions of dollars. The revised double taxation avoidance agreement is a part of Indian government’s measure to bring back the unaccounted or black money deposited in Swiss banks.
Switzerland has signed the revised tax agreements with other nations as well in accordance with OECD’s Model tax conventions to ease the bilateral exchange of information related to the bank accounts of tax evaders.
Switzerland adopted the OECD’s standards on transparency policy in 2009. After that it became mandatory for Switzerland to open up its confidentially driven banking system.
• OECD is Paris based and sets international tax standards.
• India had signed the Double Taxation Avoidance Agreement (DTAA) with Switzerland in the year 1994.
India and Switzerland also discussed upon the need to have BIPA (Bilateral Investment Protection Agreement) in place. Besides, the two nations also decided to increase multilateral cooperation starting with the study of glaciers.