New law makes it easy to trace black money in Swiss banks

New law makes it easy to trace black money in Swiss banks

New law makes it easy to trace black money in Swiss banks

The upper house of the Swiss parliament endorsed amendments to double-taxation agreements (DTAAs) in line with internationally applicable standards.

Governments, which have signed DTAAs can now secure easy legal assistance and information as well as identify an account holder from their territories by providing an IBAN number or social security number. The new amendments to Swiss banking secrecy laws can still be challenged by a popular referendum within 100 days, analysts said.

The beneficiaries from the new amendments include India, Germany, Canada, Japan, the Netherlands, Greece, Turkey, Uruguay, Kazakhstan, and Poland.

The Swiss parliament approval comes at a time when the Indian government is facing intense pressure from the opposition, the Supreme Court and the civil society to bring back black money stashed away in tax havens.

In January this year, a Swiss parliamentary panel had given a go-ahead to revised tax treaty with India, as per which, India can get information on secret bank accounts from Swiss authorities for cases dating from 2011.

Finance minister Pranab Mukherjee and Swiss Federal Councillor Micheline Calmy-Rey signed a "protocol" to amend the double taxation agreement in the area of taxes on income on August 30, 2010.

Meanwhile in Bangalore, ambassador of Switzerland to India Philippe Welti said that India could get banking details of its citizens in tax frauds and evasion cases once the Swiss parliament ratifies the revised DTAAs between the two countries.

In April 2010, the House of Representatives had agreed to enter into double-taxation treaties with these countries.

Until now, it remained a Herculean task for these governments to identify the illegal depositors because of marathon legal processes.

Coming under intense pressure from the Paris-based Organization for Economic Cooperation and Development and the G-20 leaders, the Swiss authorities have begun a process of simplifying their tax laws. Switzerland, which was initially included in the OECD's black list of countries for following banking secrecy and client-confidentiality rules, agreed to adopt its tax code, agreeing to share information in cases involving tax which is not a crime under Swiss law.