India-Switzerland ink agreement
An aim to combat KALA DHAN, India and Switzerland has signed agreement for automatic sharing of tax-related information from January 1, 2018 said the Central Board of Direct Taxes (CBDT). The policy-making body for the income tax department said the agreement was signed by CBDT chairman Sushil Chandra and Swiss ambassador to India Andreas Baum at the North Block in New Delhi. Readout Our ias institute Daily blog, Before this agreement, India had to ask Switzerland for specific bits of information against the Indian account holder in Swiss banks. Due to its earlier secretive laws it could delay or deny information altogether.
For long years Switzerland always has been at centre of debate on black money allegedly stashed by Indians abroad. It is infamously known for very strong secrecy walls around its banking practices till few years ago. In last Sometimes, huge globally Forced has resulted in Switzerland relenting on tough secrecy clauses its local laws gave to banks.
The signing of agreement comes after completion of parliamentary procedure in Switzerland for changing domestic secretive banking laws and signing of mutual agreement between India and Switzerland. In November 2017 for the implementation of AutomaticExchange of Information (AEOI), both countries had signed a joint declaration. This agreement provided that both countries will start collecting data in accordance with global standards in 2018 and exchange it from 2019 onwards. For tax transparency the norms are conforms by AEOI set by Organization for Economic Co-operation and Development (OECD).
Confidentiality and data protection requirements is to be strictly followed under the automatic information exchange framework. This agreement will ensure that both Country signatory always maintains control over its exchange partners and Share of data exchanged as per OECD norms. The automatic exchange of information will discourage Indians from stashing black money in Swiss banks.