Swiss banks details to be with India
The Swiss government has agreed to loosen its
banking secrecy laws and share data on tax evasion cases that India may be
pursuing, as part of a renegotiation of the Double Taxation Avoidance Agreement
(DTAA) that the two countries signed in 1995.
Such a reformulated tax agreement will help tighten the legal noose on tax evaders secreting their money abroad. Under present Swiss law, foreign-held accounts are protected unless there is evidence of proceeds from drugs or bribes.
Confirming that they have received the request to renegotiate the DTAA, Swiss Ambassador Philippe Welti, however, told Business Standard that his government would share tax evasion data “on specific request by the government”.
This means India will be able to seek details of bank accounts kept by citizens who are believed to have evaded taxes in India and deposited the money in overseas bank accounts. A “roving” or “fishing” enquiry is not possible.
In the past, Swiss authorities refused to share bank details under the DTAA, saying that such information concerned the enforcement of India’s tax laws and not Switzerland’s. For example, when the income tax department sought to verify the contents of bank documents seized from racehorse owner Hassan Ali Khan, who has been accused of depositing tax-evaded money in UBS, the Swiss authorities declined to provide the information.
Countries like Switzerland and other known tax havens finally agreed to comply with OECD’s tax convention after a group of 20 nations which constitute more than 85 per cent of the world’s output (G 20), threatened to take action against uncooperative nations.
“In Switzerland, tax evasion is also illegal but is normally only punishable as an offence, ie with a fine,” Welti said, reiterating that Swiss laws remain tough on cases like criminal and terrorist money.
Such a reformulated tax agreement will help tighten the legal noose on tax evaders secreting their money abroad. Under present Swiss law, foreign-held accounts are protected unless there is evidence of proceeds from drugs or bribes.
Confirming that they have received the request to renegotiate the DTAA, Swiss Ambassador Philippe Welti, however, told Business Standard that his government would share tax evasion data “on specific request by the government”.
This means India will be able to seek details of bank accounts kept by citizens who are believed to have evaded taxes in India and deposited the money in overseas bank accounts. A “roving” or “fishing” enquiry is not possible.
In the past, Swiss authorities refused to share bank details under the DTAA, saying that such information concerned the enforcement of India’s tax laws and not Switzerland’s. For example, when the income tax department sought to verify the contents of bank documents seized from racehorse owner Hassan Ali Khan, who has been accused of depositing tax-evaded money in UBS, the Swiss authorities declined to provide the information.
Countries like Switzerland and other known tax havens finally agreed to comply with OECD’s tax convention after a group of 20 nations which constitute more than 85 per cent of the world’s output (G 20), threatened to take action against uncooperative nations.
“In Switzerland, tax evasion is also illegal but is normally only punishable as an offence, ie with a fine,” Welti said, reiterating that Swiss laws remain tough on cases like criminal and terrorist money.
|
|
