In a move aimed at combating black money stashed abroad, India has signed an agreement with Switzerland that would allow automatic sharing of tax-related information from January 1, 2018, the Central Board of Direct Taxes (CBDT) has said.
'With the completion of the parliamentary procedure in Switzerland and signing of mutual agreement, India and Switzerland are set for automatic exchange of information for the period beginning 1 January, 2018,' the CBDT said. The policy-making body for the income tax department said the agreement was signed by the CBDT chairman, Mr. Sushil Chandra, and the Swiss ambassador to India, Mr. Andreas Baum, in New Delhi.
A joint declaration for the implementation of automatic exchange of information (AEOI) was signed in November between the two sides and it provided that both countries would start collecting data in accordance with the global standards in 2018 and exchange it from 2019 onwards.
While Switzerland has conformed to the global standards on automatic exchange of information with the signing of the declaration, India, on its part, has promised to safeguard the confidentiality of the data.
'It will now be possible for India to receive from September 2019 onwards, the financial information of accounts held by Indian residents in Switzerland for 2018 and subsequent years, on an automatic basis,' the government earlier said.
Switzerland, which has always been at the centre of the debate on black money allegedly stashed by Indians abroad, used to be known for very strong secrecy walls till a few years ago around its banking practices. A huge global pressure has resulted in Switzerland relenting on the tough secrecy clauses its local laws gave to the banks.
People close to the development said that several information requests on details about Indians who had accounts in Swiss banks were still pending. The automatic exchange of information conforms to a norm set by global economic body the Organisation for Economic Co-operation and Development (OECD) for tax transparency.