Switzerland agreed to share account information with India.
Switzerland on Friday ratified automatic exchange of financial account information with India and 40 other jurisdictions to facilitate immediate sharing of details about suspected black money.
Black Money: Income illegally obtained or not declared for tax purposes.
Swiss private banks were used for decades by the world’s wealthy to hide money
- According to Swiss Federal Council said the implementation is planned for 2018 and the first set of data should be exchanged in 2019.
- The Swiss Federal Council is a top governing body of Switzerland.
- The council, which is the top governing body of the European nation, will soon notify the Indian government about the exact date from which the automatic exchange would begin.
- This year, Switzerland has introduced the AEOI with 38 states and territories, including all EU (European Union) member states, and data will start to be exchanged with them in 2018.
- The decision was reportedly taken under the guidance of G20, OECD and other global organisations.
How will Switzerland proceed ?
- It will be checked whether the states and territories concerned effectively meet the requirements under the standard, especially those concerning confidentiality and data security.
- The AEOI(Automatic Exchange of Information) will be activated with each individual state or territory by means of a specific federal decree within the framework of this dispatch.
- The council said it will prepare a situation report before the first exchange of data, planned in the autumn of 2019.
- The exchange of information will reportedly be carried out in accordance with the Multilateral Competent Authority Agreement (MCAA) on the Automatic Exchange of Financial Account Information.
Special Attention of Switzerland
- Swiss banks have started seeking new safeguards so as to protect the details of their clients against misuse that could expose them to crimes such as kidnapping or blackmail.
Automatic Exchange of Information
- The new global standard on Automatic Exchange of Information (AEOI) reduces the possibility for tax evasion.
- It provides for the exchange of non-resident financial account information with the tax authorities in the account holders’ country of residence.
- Participating jurisdictions that implement AEOI send and receive pre-agreed information each year, without having to send a specific request.
Multilateral Competent Authority Agreement (MCAA)
- The MCAA is based on the international standard for the exchange of information developed by the OECD. India, on its part has promised to safeguard the confidentiality of the data received.
- India joined the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information on 3rd June, 2015, in Paris, France, alongwith Australia, Canada, Costa Rica, Indonesia and New Zealand.