Swiss parl panel gives nod to new tax treaty with India

It would eventually allow Indian government access to secret Swiss bank accounts of Indian tax evaders

PTI | January 19, 2011



A Swiss Parliamentary Committee has given the go-ahead to the revised tax treaty between India and Switzerland that would eventually allow Indian government access to secret Swiss bank accounts of Indian tax evaders.

The amendments to the treaty will now be placed before the Swiss Parliament for final approval.

Once the revised treaty gets the approval, Switzerland would provide administrative assistance to India to track cases of tax evasion and tax fraud.

The development comes at a time when the Indian government is under mounting pressure from Opposition parties and the Supreme Court to reveal the names of individuals who have stashed away black money overseas.

Swiss Parliament's Committee for Economic Affairs and Taxes (CEAT) in a statement on Tuesday said it has received the India-Switzerland double taxation treaty document and forwarded the same to the National Council.

CEAT, which has 25 members, is tasked with examining and drafting advisory opinions on messages, parliamentary initiatives, and reports concerning economic and fiscal issues, according to Swiss Parliament's official website.

Finance Minister Pranab Mukherjee and Swiss Federal Councillor Micheline Calmy-Rey signed a "protocol" to amend the double taxation agreement (DTA) in the area of taxes on income on August 30, 2010.

As per an agreement between the two countries, the information exchange was to have taken effect on January 1, 2011.

However, earlier this month, Switzerland's Federal Tax Administration department had said the protocol was still to take effect as they were yet to inform each other about extending the necessary approvals.

"In Switzerland the Parliament has not agreed upon the protocol yet.

"The exchange of information will be applicable for information that relates to any fiscal year beginning on or after the 1st January 2011, as soon as the protocol has been given effect," a department spokesperson had said.

The amended tax treaty would help the Indian government to seek information about illict wealth allegedly hidden in Swiss banks by Indians.

Earlier, the influential Swiss Bankers Association had said they would not permit "fishing expeditions", indicating that indiscriminate trawling through bank accounts would not be allowed.

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