Beware black money hoarders: Switzerland agrees on automatic sharing of bank details with India
Source : NewsBharatiDate : 21-Nov-2017
Zürich, November 21: A major breakthrough regarding unearthing the black money is in near sight as Switzerland, the safe heaven of tax evasion, has agreed automatic sharing of bank details with India. This will give India unbound direct access to details of alleged black money hoarders. This is being called as as th biggest success of the Modi govt's efforts to hunt and eliminate the black money.
The Commission for Economic Affairs and Taxes of the Council of States - a key panel of the Swiss Parliament's upper house - approved the "Automatic Exchange of Information" (AEOI) pact with India as also with 40 other countries, that would enable authorities in India get instant access to details on Indians with Swiss accounts
The panel, however, suggested strengthening the provisions for individual legal claims and has asked the Swiss government to submit to Parliament an amendment "to strengthen concrete individual legal protection and to ensure that no exchange of information can take place for individual cases where a violation of essential legal claims is likely."
The panel's proposal will now have to be approved by the upper chamber of Swiss Parliament, the Council of States, in the winter session beginning 27 November. The Swiss move will help remove the veil of secrecy in Swiss bank accounts and give India unfettered access to details of alleged black money hoarders.
"Automatic Exchange of Information" (AEOI) pact Under the system of automatic exchange of information, the Swiss authorities will allow access to account number, name, address, date of birth, tax identification number, interest, dividend, receipts from insurance policies, credit balance in accounts and proceeds from sale of financial assets.
With AEOI, information regarding bank and safekeeping accounts is reported by the banks to the domestic tax authorities. These then exchange the information with the tax authorities in their AEOI partner countries. Responsibility for levying the taxes thus lies fully with the tax authorities in the AEOI partner countries. The following informational video provides a detailed explanation of how the process works.
The access to bank data will, however, be through government channel with the Swiss government forwarding the relevant information relating the bank account to the authorities in India.
This means that the domestic bank client confidentiality in Switzerland will remain unaffected by the AEOI.
Switzerland has joined a global alliance of nearly 100 countries who have so far committed to adopt global standards for the automatic exchange of information (AEOI) in order to check cross-border tax evasion.
As per the AEOI proposal, approved by the lower house of Swiss parliament, the National Council, the process of automatic information exchange on financial accounts between India and Switzerland will take effect from the next year with the first exchange of information materialising in 2019.