JOIN USSwiss govt sheds secrecy wall
The Switzerland government has agreed to exchange of information and mutual administrative assistance in tax matters with overseas authorities. This is seen as a major boost for India and other countries seeking details on suspected black money stashed in Swiss banks.
The development virtually pulls down the famed secrecy wall surrounding Swiss banks.
According to the latest official figures released by the Swiss National Bank, Indians in Swiss banks held about Rs. 9,000 crore (2.18 billion Swiss francs) at the end of 2012.
The overall amount held in Swiss banks by entities from across the world is estimated at around Rs. 90 lakh crore, the report said.
In a White Paper on black money tabled in the Indian Parliament last year, the government said total liabilities of the Swiss banks towards Indians have been coming down since 2006 and fell by more than Rs. 14,000 crore between 2006 and 2010.
Switzerland has been facing intense global pressure to cooperate with overseas authorities in order to share information about accounts in its Swiss banks, which have long been known to be misused by entities from across the world, including India, for evading taxes in their local jurisdictions.
Buckling under the international pressure, Switzerland has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The convention has now been signed by 58 countries, including India. The convention provides for sharing of information among all its signatories for fighting tax evasion and concealment of illicit funds.
This marks "the end of banking secrecy" in Switzerland, said Pascal Saint-Amans, the head of tax issues at the Organisation for Economic Cooperation and Development.
The inclusion of Switzerland in the agreement to exchange information will be "highly significant" in the fight against tax evasion, he said. The Paris-based OECD has spearheaded a clampdown on tax evasion and the concealment of illicit funds.
Until now, many tax authorities, and their governments, have complained that cross-border tax investigations have been hampered by the complex routes used to hide funds and the obstructionism on the part of some national authorities.