If all goes well, India will in 2019 automatically receive information on Indians holding bank accounts in Switzerland.
The automatic exchange of information in tax matters (AEOI) with India and 21 other countries should enter into force (EIF) on January 1, 2018, a spokesperson for the Swiss Federal Department of Finance (FDF) told The News Minute today.
"There is nothing special about India, this is a consultation we hold with all countries," Anne CĂ©sard said adding that the critical step of getting the green signal from the Swiss Parliament remained to be secured. "In all likelihood, it should be fine," she added.
Confusion arose earlier this week when it was reported that Switzerland added 20 more countries to the AEOI process ready for exchange in 2019 and India was missing from that list. The confusion was confounded when comments surfaced that Switzerland had already engaged with India as part of the latterâ€™s membership to the G-20.
Some reports also cross communicated that this mechanism was already in place citing examples from the European Union (EU). All these concerns are irrelevant and misleading. Switzerland has bilateral procedures with all countries with a neighbouring EU states progressing on a faster-track within the over arching umbrella of the AEOI. Being a neutral country which does not belong to any bloc, it engages in bilateral negotiations with every country to ensure parity and relevance.
The consultations with the relevant authorities in Switzerland (banking and finance sector mainly) which commenced for India in 2016 will last until March 15 2017. The AEOI with India should enter into force on January 1, 2018 so data can be exchanged a year later in 2019.
Mindful of its place as an important financial centre, Switzerland is keen to protect data transfer which is a pre-requisite for the introduction of AEOI.
While the world still views the Alpine nation as the first resort of illegal monies and assets, that is not the case. Over the last decade, Swiss banking secrecy laws have almost ceased to exist. The bulk of the world's black money now rests in London and Delaware in the United States (US).
Switzerland however controls some 30% of global assets under management (AUM) which Swiss bankers say is legitimate business, much to the envy of their competitors.
From a legal viewpoint, the automatic exchange of information with these countries will be implemented based on the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information (MCAA). The MCAA is based on the international standard for the exchange of information developed by the OECD.
Switzerland will introduce the AEOI already in 2017 with all of the EU states including Gibraltar and with Australia. The same applies to Iceland, Norway, Japan, Canada, South Korea and the British crown dependencies of Jersey, Guernsey and the Isle of Man.
With agency inputs