In its fight against black money menace, India will have to wait till 2018 for Switzerland to provide bank account details of Indians under the ‘automatic information exchange’ framework.
Under a global framework, more than 40 jurisdictions including India had agreed to become ‘early adopters’ of an ‘automatic exchange of information’ mechanism prepared by global body OECD to help each other in fighting the tax evasion and frauds.
“This so-called early adopters group plans to collect data from 2016 and exchange information for the first time in September 2017,” according to a new report by the Swiss government.
However, Switzerland would see its ‘first exchange’ under this framework taking place in the year 2018.
As per the report, as many as 58 countries would see their ‘first exchange’ taking place in 2017, followed by another 35 in the year 2018.
While India is part of the ‘First Exchange 2017’ group, it will have to wait till 2018 for ‘automatic exchange of information’ with Switzerland because of the Alpine nation being in the second grouping.
The details that would be shared include account number, name, address and date of birth, tax identification number, interest and dividends, receipts from certain insurance policies, credit balances on accounts, as also proceeds from the sale of financial assets.
Explaining the exchange process, the report said: If a taxpayer in a Country A has a bank account in Country B, the bank would disclose financial account data to authorities in the Country B, which would automatically forward the details to authorities in Country A to help them examine the data.
Once in place, the mechanism would help the Indian authorities to have a strong ground while seeking to bring back and tax the funds stashed overseas by its citizens.
To curb illicit fund flows and to tax unaccounted wealth stashed abroad, India has stepped up its efforts, including re-negotiating tax treaties with various countries. India expects automatic exchange to help curb this menace.
Many countries worldwide are taking steps to address the menace of illicit funds being stashed away in tax havens.
On ways to prevent black money menace in the future, Finance Minister Arun Jaitley has also said that the world is moving towards automatic exchange of information.
After meeting his Swiss counterpart Eveline Widmer-Schlumpf in Davos last month, Jaitley said the bilateral agreements with regard to automatic exchange of tax information with various countries, including Switzerland, would be “the long term solution to check this menace.”