New Swiss Banking Norms in Tow, Might Not Help India

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The proposed changes that Switzerland has made to treat the stolen information have created optimism in India. The reason for the same is most analysts assume that this will impact the share of the details on tax evaders. A closer look reveals that it is too early to celebrate the optimism for the Indian government and the others across the world.

The Swiss government made an announcement that it has begun consultations to revise the Tax Administrative Assistance Act. This is taken up to ease the current Swiss practice to treat the stolen data. The legislative amendment that is proposed will be implemented next year by the Switzerland parliament after consultations. This will clarify the situation of taking account of the developments on a global scale.

It has become highly essential for Switzerland to address the stolen data as the country looks forward to score high in imminent OECD review. The reason for this is that this review will judge how the country deals with the requests for its administrative assistance.

Apart from the OECD review, there is a peer review group comprising of 30 countries, and of these India is a vice-chair. This group will evaluate the processes for months from the autumn of this year. As per the State Secretariat for the International Financial Matters of the Swiss Government, it is an imperative step for the country to address the issue of stolen information.

Since the year 2011, the existing parameters have transitioned and the pressure on the country has increased to a great extent. Switzerland has received several requests based on the stolen data. As per the prevailing Swiss law, there is no permission to share the details on requests to seek the stolen information issue.

As per the statement based on the consultations from the government of Switzerland, it should be possible to reply to the requests in case a foreign country has got the stolen. This is done either via public sources or normal administrative assistance channels. As per the deputy spokesperson of the Secretariat for the International Financial Matters, Anne Cesard, the requests for the foreign tax administrations based on the stolen data will be possible only when this revision is in force.

As per the current Switzerland India DTA, the country can provide the details for the fiscal year 2011 or later only. So, Switzerland will not be able to provide the details of stolen information of the HSBC account that happened before this time period. This will be a problem for India.

 

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