As per the reports of economictimes
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 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.
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.
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 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.
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.