India, Switzerland sign protocol to amended Double Taxation Avoidance Agreement
India and Switzerland on Monday signed a protocol to the Double Taxation Avoidance Agreement that would enable the government get information about some of the wealth illegally stashed away in Swiss banks.
“The protocol will be the basis or the institutional framework for getting information from Switzerland in cases where there are instances of evasion,” Joint Secretary in the Ministry for External Affairs Banashree Bose Harrison told newspersons hours before the revised pact was inked by Finance Minister Pranab Mukherjee and Swiss Foreign Minister Micheline Calmy-Rey.
“The revised Double Taxation Agreement contains provisions on the exchange of information in accordance with the OECD standards, which were negotiated in line with the parameters decided by the (Swiss) Federal Council,” said a statement from the Swiss Federal Department of Finance.
It became mandatory for Switzerland to open up its confidentiality-driven banking system after adopting the OECD's (Organisation for Economic Cooperation and Development) standards on transparency last year. Ms. Calmy-Rey described the changes as very important for both countries since these enable India to extend the lowest withholding tax rate on dividends, interest, royalties and payments for technical services.
She pointed out that the amendments were not unique to India and were extended to other countries such as the United States.
Need for regular debate
Ms. Calmy-Rey discussed the need for regular political discussions at all levels during her delegation-level talks with External Affairs Minister S.M. Krishna. Both sides agreed upon the need for a Bilateral Investment Protection Agreement, for which talks resumed this month.
Both countries also decided to step up multilateral cooperation beginning with a study of glaciers during the Swiss Foreign Minister's meeting with Environment Minister Jairam Ramesh.
Ms. Calmy-Rey visited the country in 2007, when she was President.