Amended DTAA with Switzerland will provide sharing of information on Indians having unaccounted wealth in secret Swiss bank accounts
It will soon be easier to get specific details of Indians having unaccounted wealth in secret Swiss bank accounts. The Union Cabinet is likely to clear on Thursday, the amended Double Taxation Avoidance Agreement (DTAA) with Switzerland, official sources told to reporters.
The amended protocol will pave the way for Indian authorities to obtain from their Swiss counterparts details regarding illegal money and the ownership of those accounts in specific cases where there is a proper justification for such a request, they said.
Both the countries had recently completed the renegotiation of the DTAA. The amended DTAA will take effect only after it is notified in both the countries, sources said, adding that among other changes expected in the tax treaty include those on capital gains and shipping.
Earlier, the tax authorities in Switzerland had expressed reluctance to part with details about the Swiss bank accounts of Indians saying it was not an issue pertaining to the DTAA and that the agreement did not have provisions regarding such information exchange.
However, last year, Switzerland had decided to adopt the OECD norms on administrative assistance on the lines of the OECD Model Tax Convention, which means the request for any such information should be backed by evidence including on tax evasion. But the Swiss authorities need not entertain a ‘roving enquiry’ or just a ‘fishing expedition’ that will amount to violation of the privacy of individuals.
Following the bilateral discussions, which began in April 2009, the Swiss authorities agreed to include the amendments, particularly with regard to the Article on Exchange of Information, in the DTAA to allow Indian tax authorities to access information such as bank account details. The tax authorities, however, will have to get the required permission from higher authorities before seeking information from their counterparts in Switzerland, the sources said.
The Finance Minister, Mr Pranab Mukherjee, had recently informed the Lok Sabha about the conclusion of the DTAA renegotiation with Switzerland. He said the Government is actively pursuing the matter so that the amendments come into effect as soon as possible. However, he said there was no verifiable estimate of the amount of black money stashed away abroad. The Government is mulling revising tax treaties with many other countries, including Mauritius. A case regarding black money from India hidden in bank accounts in other countries is also being heard by the Supreme Court.