Switzerland, India signed agreement to catch tax evaders

India and Switzerland signed an automatic exchange of financial information deal which complements govt’s crackdown on black money. This means that the option of concealing the illegal wealth through Swiss banks is most likely to be closed.  This historical move directly complements govt’s demonetization move to target domestic black money.

The 'Joint Declaration' for implementation of AEOI signed on Tuesday between India and Switzerland provides that both countries will start collecting data in accordance with the global standards in 2018 and exchange it from 2019 onwards.

Sushil Chandra, chairman, Central Board of Direct Taxes, and Gilles Roduit, deputy chief of mission of the Swiss Embassy in India singed this historical pact. It is worth mentioning that the pact follows several years of negotiations between the two countries.

Analysts are expecting that these moves will certainly help the economy in longer term in curbing the black money. They are saying that “Even if the measures do not extinguish the problem of black money, they will increase the cost and risks of garnering illegal wealth.”
The Switzerland Department of Finance said the automatic exchange of information with India will be implemented based on the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information (MCAA).
The MCAA is based on the international standard for the exchange of information developed by the OECD.

According to Swiss Federal Department of Finance, the signing of the joint declaration with India confirms Switzerland’s international commitment to implementing the automatic exchange of Information (AEOI) standard.
“Switzerland is thus strengthening its network of AEOI partner states. India meets in particular the high demands in terms of adherence to the principle of speciality and the safeguarding of confidentiality for the data delivered, which are prerequisites for the introduction of the AEOI,” it said.