India is among 86 countries with which the Swiss Federal Tax Administration (FTA) has exchanged financial account information within the framework of global AEOI standards this year.
India had received the first set of details from Switzerland in September 2019 under AEOI (Automatic Exchange of Information), when it involved 75 countries.
This year’s information exchange involved nearly 3.1 million (31 lakh) financial accounts, the FTA said in a statement on Friday. The number of such accounts was similar in 2019.
While the statement did not explicitly mention India among the 86 countries, officials told PTI that India is among the prominent countries with which Switzerland has shared details about the financial accounts of clients of Swiss banks and various other financial institutions.
Officials further said that a “considerable number” engage with Indian citizens and entities in the general exchange of information on more than 3 million Swiss financial accounts this year with 86 countries.
Furthermore, the Swiss authorities have already shared information on more than 100 Indian citizens and entities in the last year when receiving requests for administrative assistance in cases involving investigations into financial irregularities, including tax evasionofficials added.
These cases mainly relate to older accounts that could have been closed before 2018, for which Switzerland has shared details with India under a previous mutual administrative assistance framework, as the Indian authorities had provided prima facie evidence of tax-related irregularities. by those account holders. AEOI is applicable only to accounts that are active or closed during 2018.
Some of these cases relate to entities established by Indians in various overseas jurisdictions such as Panama, the British Virgin Islands, and the Cayman Islands, while the individuals include mainly businessmen and some politicians and former royals, as well as their relatives.
However, officials declined to share details about the exact number of accounts or the amount of assets held in the accounts of the Indians, whose information has been shared with India, citing strict confidentiality clauses governing the exchange framework.
Information shared by the Swiss authorities includes identifying information, account and financial information, such as name, address, country of residence and tax identification number, as well as information about the reporting financial institution, account balance and capital inflows. .
The information exchanged will allow the tax authorities to verify whether taxpayers have correctly declared their financial accounts on their tax returns. The next exchange would take place in September 2021.
In its statement, FTA said that the 86 countries covered by AEOI this year include 11 new jurisdictions: Anguilla, Aruba, Bahamas, Bahrain, Grenada, Israel, Kuwait, Marshall Islands, Nauru, Panama and the United Arab Emirates, in addition to the existing list of 75 countries, with whom information was shared last year.
In addition, FTA said that the exchange of information this year has been reciprocal with 66 countries. In the case of 20 countries, Switzerland received information but did not provide any, either because those countries still do not meet international requirements on data confidentiality and security (9 countries) or because they chose not to receive data (11 countries).
A total of 38 countries will provide their data to Switzerland in accordance with the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) before December 31, 2020. These countries have reported technical difficulties due to the Covid crisis. 19.
Coronavirus Outbreak: Live Updates
The first such exchange in Switzerland took place in late September 2018 and involved 36 countries, but India was not on the list at the time.
Currently, around 8,500 reporting financial institutions (banks, trusts, insurance companies, etc.) are registered with the FTA. These institutions collected the data and transferred it to FTA. The count has risen from around 7,500 last year.
FTA sent information on about 3.1 million financial accounts to partner states and received information on about 8.15,000 financial accounts from them.
FTA also said that it cannot provide any information on the amount of financial assets.
Switzerland is committed to adopting the global standard for the automatic international exchange of information in tax matters. The legal basis for the implementation of AEOI in Switzerland entered into force on January 1, 2017.
This is the second time that India has received details from the Swiss authorities within the framework of the AEOI, which provides for the exchange of information on financial accounts, currently active, as well as accounts that were closed during 2018, the year in which it entered framework agreement in force. .
However, AEOI only relates to accounts that are officially in the name of Indians and may include those that are used for business and other genuine purposes.
The Global Forum of the Organization for Economic Cooperation and Development reviews AEOI implementation.
According to experts, the data received by India can be quite helpful in establishing a robust prosecution case against those who have some unaccounted for wealth as it provides full details of deposits and transfers as well as all earnings, including through investments in securities and others. goods.
On condition of anonymity, several officials said the details relate primarily to businessmen, including non-resident Indians who are now settled in several Southeast Asian countries, as well as the United States, the United Kingdom and even some African countries and South Americans.
A Swiss delegation was in India in August last year before the first set of details could be shared and the two sides also discussed possible steps to speed up the execution of tax information exchange requests made by India in specific cases.
Many Indians are feared to have closed their accounts after a global crackdown on black money led Switzerland to give in to international pressure to open its banking sector to scrutiny and to clear the perception that Swiss banks are a safe haven for investors. undisclosed funds.
Switzerland agreed to AEOI with India after a lengthy process, including a review of the necessary legal framework in India on data protection and confidentiality.
.
