Why Switzerland Will Cease To Be A Tax Haven For Indians From 2018 Onwards
On Tuesday (22 November), Switzerland agreed to automatic sharing of information with India on Swiss bank accounts of Indians as of September 2018 and onwards. The first such exchange will take place in September 2019.
The 'Joint Declaration' for implementation of AEOI signed today between India and Switzerland provides that both countries will start collecting data in accordance with the global standards in 2018 and exchange it from 2019 onwards. As per a Finance Ministry statement,
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.
Switzerland has for long been at the centre of the debate on black money allegedly hoarded by Indians abroad. Global pressure made Switzerland reduce the tough secrecy clauses provided by its local laws to the banks.
The Swiss Federal Department of Finance said in a statement,
Switzerland is thus strengthening its network of AEOI partner states. India meets in particular the high demands in terms of adherence to the principle of speciality and the safeguarding of confidentiality for the data delivered, which are prerequisites for the introduction of the AEOI.
Revenue Secretary Hasmukh Adhia tweeted:
Earlier, on 6 June, Prime Minister Narendra Modi had met Swiss President Johann Schneider-Ammann at Geneva to talk about the need for speedy exchange of information to combat tax evasion and begin negotiations on the Agreement for Automatic Exchange of Information. Later, Adhia and Switzerland's State Secretary for International Financial Matters Jacques de Watteville met on 15 June, deciding to move towards an early agreement for the implementation of AEOI between the two countries.
The Swiss Federal Council has authorised the Federal Department of Finance to conduct a consultation for the introduction of the AEOI with India and other countries.
It will be initiated soon. Thereafter, the corresponding federal decrees will be submitted to Parliament for approval.
The signatories of the Joint Declaration for implementing AEOI was signed today were CBDT (Central Board of Direct Taxes) Chairman Sushil Chandra and Deputy Chief of Mission of Swiss Embassy Gilles Roduit here in India.