India asks Switzerland to ratify global tax convention

NEW DELHI: India has asked Switzerland to expeditiously ratify the OECD convention on automatic exchange of tax information, a move which will help deal with menace of black money.

"I would urge you and your (Swiss) government to ratify the multilateral convention on mutual administrative assistance in tax matters as early as possible," outgoing Finance Minister P Chidambaram has said in a letter to Swiss counterpart Eveline Widmer-Schlumpf.

"Once you ratify the convention, I am confident that your government will abide by its obligation under the convention as well as under the declaration that your country signed on May 6 2014," he added.

India and a large number of other countries, including Switzerland, have adopted a global declaration for automatic exchange of tax information under auspices of OECD.

The adoption of the Declaration on Automatic Exchange of Information in Tax Matters recently is aimed at sharing of information on illicit funds stashed abroad.

Chidambaram in his letter to the Swiss head of the Federal Department of Finance said that though Switzerland is a signatory to the convention it has yet to ratify it.

The declaration, he added, calls upon "all countries to sign and ratify the multilateral convention".

It recognises that investments kept offshore by tax payers should not go untaxed and the cooperation between countries should be on automatic basis.

The Paris-based Organisation for Economic Cooperation and Development (OECD) sets the global tax standards and frames conventions against tax frauds, among others.

Meanwhile, moving closer towards doing away with banking secrecy practices, Switzerland has started ground work for implementation of automatic exchange of information on tax matters.

Switzerland, known for strong banking secrecy rules, had agreed to proposed new standard for automatic exchange of tax information earlier this month.