FM’s 4th Let­ter to Swiss on Tax Is­sue

The Economic Times - - Economy - OUR BUREAU

Fi­nance min­is­ter P Chi­dambaram has pressed Switzer­land for ex­pe­di­tious rat­i­fi­ca­tion of the mul­ti­lat­eral con­ven­tion on mu­tual as­sis­tance in tax mat­ters, writ­ing a fourth let­ter in four months to his coun­ter­part, Eveline Wid­mer-Sch­lumpf, on the is­sue of ac­tive shar­ing of in­for­ma­tion be­tween the two coun­tries on tax is­sues.

“I would urge you and your (Swiss) govern­ment to rat­ify the mul­ti­lat­eral con­ven­tion on mu­tual ad­min­is­tra­tive as­sis­tance in tax mat­ters as early as possi- ble,” the out­go­ing fi­nance min­is­ter wrote on May 15, just a day be­fore the dec­la­ra­tion of elec­tion re­sults in In­dia.

In­dia and a large num­ber of other coun­tries, in­clud­ing Switzer­land, have adopted a global dec­la­ra­tion for au­to­matic ex­change of tax in­for­ma­tion un­der the aegis of Paris­based Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment (OECD).

The adop­tion of the Dec­la­ra­tion on Au­to­matic Ex­change of In­for­ma­tion in Tax Mat­ters is aimed at au­to­matic ex­change of in­for­ma­tion on il­licit funds stashed abroad. “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,” Chi­dambaram said in the let­ter.

Switzer­land is yet to rat­ify the con­ven­tion al­though it is a sig­na­tory to it.

The dec­la­ra­tion calls upon “all

In­dia has been seek­ing in­for­ma­tion on bank ac­counts of its na­tion­als in Swiss banks but has not had much suc­cess so far

coun­tries to sign and rat­ify the mul­ti­lat­eral con­ven­tion”, Chi­dambaram added.

The dec­la­ra­tion recog­nises that in­vest­ments kept off­shore by tax­pay­ers should not go un­taxed and the co­op­er­a­tion be­tween coun­tries should be on an au­to­matic ba­sis.

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

In­dia has been seek­ing in­for­ma­tion on bank ac­counts of its na­tion­als in Swiss banks but has not had much suc­cess so far.

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