India gets information on Swiss bank accounts

India has for the first time got information on bank accounts its residents hold in Switzerland, marking a significant milestone in the country's attempt to trace suspect black money stashed abroad.

India is among the 75 countries with whom Switzerland's Federal Tax Administration (FTA) has exchanged information on financial accounts under the framework of global standards on AEOI (Automatic Exchange of Information), said a spokesperson for FTA.

The AEOI framework provides for exchange of information on active financial accounts and those accounts that were closed during 2018. The next exchange will happen in September 2020, the FTA spokesperson added.

However, the information exchange is governed by strict confidentiality clauses, and the FTA officials refused to disclose specific details on the number of accounts or about the quantum of financial assets associated with the Indian clients of Swiss banks. The AEOI only relates to accounts that are officially in the name of Indians and they might include those used for business and other genuine purposes.

Overall, the FTA has sent information on around 3.1 million financial accounts to the partner states and received information on around 2.4 million from them.

The exchanged details include identification, account and financial information. These include name, address, state of residence and tax identification number, as well information concerning the financial institution, account balance and capital income.

In the case of 12 countries, Switzerland received information but did not provide any, either because those countries do not yet meet the international requirements on confidentiality and data security (Belize, Bulgaria, Costa Rica, Curaçao, Montserrat, Romania, Saint Vincent and the Grenadines, Cyprus) or because they chose not to receive data (Bermuda, British Virgin Islands, Cayman Islands, Turks and Caicos Islands).

The data was collected by the FTA from around 7,500 institutions including banks, trusts and insurers.

"The largest exchange was with Germany, as was the case in the previous year. The FTA cannot provide any information on the amount of financial assets," the statement added.

Asked about specific details relating to India, the FTA spokesperson said, "the communication of statistical data is subject to the confidentiality clauses as well." To another query on the next exchange of information with India, the spokesperson said,"according to the international agreement in place, the exchanges have to take place within nine months after the end of the respective calendar year. This means the exchange takes place in September, except for corrections." The Swiss government said Switzerland has committed itself to adopting the global standard for the international automatic exchange of information in tax matters.

The legal basis for the implementation of the AEOI in Switzerland first came into force on January 1, 2017.

"The exchanged information allows the cantonal tax authorities to verify whether taxpayers have correctly declared their financial accounts abroad in their tax returns," the FTA said.

It said the exchange will take place with around 90 countries next year.