On June 16, 2017, Switzerland ratified an automatic exchange of financial account information with India in order to facilitate immediate sharing of details about suspected black money.
For a long time, Switzerland has been considered a safe haven for black money stashed abroad by Indians.
- The decision by the Swiss Federal Council on Automatic Exchange of Information (AEOI) on tax matters was reached after several rounds of negotiations between India and Switzerland.
- The decision was reportedly taken under the guidance of G20, Organization for Economic Cooperation and Development (OECD) and other multilateral organisations.
Details of Automatic Exchange of Information (AEOI) agreement with Switzerland:
- Swiss Federal Council said that the implementation of the information exchange is planned for 2018 and that the first set of data exchange would happen in 2019.
- The council has mentioned that it will prepare a situation report before the first exchange of data takes place somewhere around autumn 2019 and will notify the Indian government regarding the exact date from which the “automatic exchange” would begin.
- The exchange of information will reportedly be carried out in accordance with the Multilateral Competent Authority Agreement (MCAA) on the Automatic Exchange of Financial Account Information.
This year, Switzerland has introduced the AEOI with 38 states and territories, including all EU member states and data will start to be exchanged with them in 2018.
About Automatic Exchange of Information (AEOI):
Automatic Exchange of Information (AEOI) is a tax standard that governs how tax authorities of participating countries exchange information with one another related to taxpayers’ accounts with foreign financial institutions.
- The AEOI standard has been developed by the OECD.
- Nearly 100 countries have already committed to implementing AEOI.
- Under AEOI, financial institutions in participating countries identify all clients that are residents of another participating jurisdiction. Once such a reportable person is identified, the financial institution will report the relevant information annually to its domestic tax authorities, which will forward the data to the tax authority of the jurisdiction in which the reportable person is resident for tax purposes.
- Currency: Swiss franc
- Capital: Bern