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Govt receives first batch of Swiss account holders' details
By TII News Service
Oct 07, 2019 , New Delhi

    

THE Government of India today received the first tranche of Swiss bank account details of its nationals under a new automatic information exchange pact in what is seen as a major milestone in the Government's fight against black money stashed abroad. India is among 75 countries with which Switzerland's Federal Tax Administration (FTA) has exchanged information on financial accounts within the framework of global standards on AEOI. The next exchange of information is stated to take place in September 2020.

This is the first time that India has received details from Swiss authorities under the AEOI framework, which provides for exchange of information on financial accounts, currently active as well as those accounts that were closed during 2018, the year in which the framework agreement became effective. However, the information exchange is governed by strict confidentiality clauses, and the FTA officials refused to disclose specific details on the number of accounts or about the quantum of financial assets associated with the Indian clients of Swiss banks.

However, the AEOI only relates to accounts that are officially in the name of Indians and they might include those used for business and other genuine purposes. Overall, the FTA has sent information on around 3.1 million financial accounts to the partner states and received information on around 2.4 million from them. The exchanged details include identification, account and financial information. These include name, address, state of residence and tax identification number, as well information concerning the financial institution, account balance and capital income

Separately, the Swiss government mentioned in a statement that the number of countries with which the AEOI (Automatic Exchange of Information) has taken place this year is 75, out of which there was reciprocity with 63 countries. In the case of 12 countries, Switzerland received information but did not provide any, either because those countries do not yet meet the international requirements on confidentiality and data security (Belize, Bulgaria, Costa Rica, Cura?ao, Montserrat, Romania, Saint Vincent and the Grenadines, Cyprus) or because they chose not to receive data (Bermuda, British Virgin Islands, Cayman Islands, Turks and Caicos Islands)

The data was collected by the FTA from around 7,500 institutions including banks, trusts and insurers. The Swiss government stated that Switzerland has committed itself to adopting the global standard for the international automatic exchange of information in tax matters. The legal basis for the implementation of the AEOI in Switzerland first came into force on January 1, 2017. It also stated that the exchange would take place with around 90 countries next year.The first such exchange took place at the end of September 2018 with 36 countries.

According to experts, the data received by India can be quite useful for establishing a strong prosecution case against those who have any unaccounted wealth, as it provides entire details of deposits and transfers as well as of all earnings, including through investments in securities and other assets. Besides, there are at least 100 cases of older accounts held by Indians that might have been closed before 2018, for which Switzerland is in the process of sharing details with India under an earlier framework of mutual administrative assistance as Indian authorities had provided prima facie evidence of tax-related wrongdoing by those account holders. These relate to people engaged in businesses like auto components, chemicals, textiles, real estate, diamond and jewellery and steel products.

 
 
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