Black money menace: Switzerland moves closer to automatic tax info exchange

BERN/NEW DELHI: Switzerland today agreed to join the global framework that allows automatic exchange of tax information, a move that would bolster efforts of various countries, including India, in their fight against black money menace.

The approval from Swiss Federal Council comes close on the heels of G20 leaders discussing black money issue at their just concluded meeting in Australia.

At the meet, Indian Prime Minister Narendra Modi asked every country, especially tax havens, to provide information for tax purposes in accordance with treaty obligations.

"The question regarding the countries with which Switzerland should introduce this exchange of data is not affected by the signing of the multilateral agreement; it will be presented to Parliament separately at a later stage," Swiss government said in a statement today.

This development also comes at a time when India is making all efforts to bring back unaccounted money stashed by its citizens in overseas jurisdictions.

The international agreement, developed within the framework of OECD (Organisation for Economic Cooperation and Development) forms a basis for the future introduction of the cross-border automatic exchange of information.

In a separate statement, Paris-based OECD said Switzerland has become the 52nd jurisdiction to sign the MCAA (Multilateral Competent Authority Agreement) that would allow it to go forward with plans to activate automatic exchange of financial account information in tax matters with other countries beginning in 2018.

"The landmark decision comes just weeks after Switzerland told the Global Forum on Transparency and Exchange of Information for Tax Purposes that it would implement in a timely manner the Standard for Automatic Exchange of Financial Account Information in Tax Matters developed by the OECD and G20 countries," it said.

The Swiss decision is subject to Parliamentary approval, as well as the possibility that voters may be asked to approve the necessary laws and agreements, OECD said.

Last month, 51 states and territories signed MCAA on the fringes of the plenary meeting of the Global Forum in Berlin.

MCAA sets out the conditions for the annual exchange of account information between the competent authorities of two countries in accordance with the OECD standard.

"The list of states with which information is to be exchanged automatically can be submitted at a later stage," the statement said.