Swiss banks will share account info of tax evaders

Discussion in 'Politics & Society' started by EagleOne, Aug 31, 2010.

  1. EagleOne

    EagleOne Regular Member

    May 10, 2010
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    NEW DELHI: In a major step towards the government getting hold of details of Indian money stashed in Swiss bank accounts, a revised agreement with Switzerland will allow investigators to access information relating to not just tax fraud but evasion as well.

    The reworked double taxation agreement ( DTA), signed by India and Switzerland on Monday, will mean Indian authorities can seek information about account-holders in Swiss banks from January 2011 as long as they have a case, but the agreement won't facilitate a fishing expedition, Swiss foreign minister Micheline Calmy-Rey said.

    In an exclusive interaction with TOI, Calmy-Rey said starting January 1, 2011, Swiss authorities will provide information to India on cases of tax fraud and tax evasion. Ever since reports emerged of Indians having accounts in tax havens like Liechtenstein and the success of governments like the US in accessing these accounts, New Delhi has been working to get better terms from the Swiss.

    A new deal between India and Switzerland may be major step forward in the fight against tax fraud.

    "Under the revised pact, we will give information to India not just in cases of tax fraud but also in tax evasion cases. We are also making a major concession for India in that we will start this process retroactively from January 1, 2011, as soon as ratification of the revised agreement has taken place in the course of 2011," Swiss foreign minister Micheline Calmy-Rey said.

    She also pegged the total amount of money in Swiss banks at 2,100 billion francs, or $2,050 billion, half of which were institutional funds.

    "We don't have individual or a country-wise break-up of the money with Swiss banks but we do know that the total amount in the country's banks is around 2,100 billion francs. And half of this amount belongs to institutional clients," Calmy-Rey said in reply to a query that close on to $1.4 trillion in Indian black money was parked in Swiss banks. If half of the $2,050 billion is institutional money, the Swiss foreign minister said, the unaccounted-for money stashed abroad would be a little over $1,025 billion. Even if Indians account for 50% of this figure, their share would come to only $500 billion.
    Rajya Sabha MP Ram Jethmalani, who has maintained in SC that government can't claim immunity from disclosing documents related to black money in Swiss banks, said last week that $1,500 billion in black money was lying in Swiss banks.

    Calmy-Rey also made it clear that the information under the revised agreement could be subject to conditions stipulated by OECD.

    Read more: Swiss banks will share account info of tax evaders - India - The Times of India Swiss banks will share account info of tax evaders - India - The Times of India
  3. keshtopatel

    keshtopatel Regular Member

    Mar 7, 2010
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    India will not be able to get its hands on inoperative Swiss accounts that may have been used to stash away black money as the tax treaty worked out with the country will only cover active accounts.

    “The new provision will be applicable only for prospective information and not for past information,” finance minister Pranab Mukherjee said in the Lok Sabha on Tuesday.

    A limitation of benefit clause has also been brought into the tax treaty to prevent misuse of the treaty benefits. This clause provides that the treaty benefits could be availed only on fulfilment of certain conditions.

    Black money has become a major political issue in India in the last election with the then government promising to take every possible step to bring back this unaccounted or criminal money.

    “The elaborate exchange of information provisions will set the trend for future treaties and re-negotiation of current treaties as well,” said Amitabh Singh, partner, Ernst & Young. He said under the current tax treaty India was not able to obtain banking information from Switzerland.

    “The protocol now seeks to amend the Article to enable exchange of such information,” the finance minister said in a statement.

    The pact will also allow sharing of details with agencies other than tax ones, which was not the case earlier. “However, the new Article also provides for use of information by such other purposes which are allowed under the laws of both states and the competent authority of the supplying state authorises such use,” Mr Mukherjee said.

    The finance minister and Swiss foreign minister Micheline Calmy-Rey signed a protocol for revising the double taxation avoidance the pact on Monday.

    A specific provision also ensures that information will be exchanged even if there was no domestic interest. The new tax treaty will also cover income from international shipping.

    The Paris-based OECD sets the international tax standards. Switzerland has entered into revised tax pacts with many countries in accordance with OECD’s Model Tax Convention to facilitate bilateral exchange of information related to bank account details of tax evaders.

    DTAAs are pacts between two countries that seek to eliminate double taxation of income or gains arising in one country and paid to residents or companies of the other country. The idea is to ensure that the same income is not taxed twice.

    Swiss treaty on black money doesn’t cover past information - The Economic Times
  4. sob

    sob Moderator Moderator

    May 4, 2009
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    New Delhi
    This is really great with this all our politicians and other tax defrauders will go scot free. What will happen to the money deposited before January 2011.

    This is an agreement that keeps every body happy. The swindlers from the last 63 years get to keep their ill gotten gains and the politicians will tom tom this as an achievement in their fight against black money.
  5. Tshering22

    Tshering22 Sikkimese Saber Senior Member

    Aug 20, 2010
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    Gangtok, Sikkim, India
    90% of the Swiss bank money belongs to our bloody politicians who hide it there under false names and identities. What is the use even if Swiss government is sincere? Our politicians will just pretend to do something to get that $ 3.5 trillion back but do nothing since it is now "their money".

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