India has accused Switzerland of “providing protection to taxpayers found to have evaded Indian taxes” and seriously undermining India’s efforts in tackling offshore tax evasion and stashing of unaccounted income abroad”.
Union Finance Minister P. Chidambaram in his third letter to his Swiss counterpart Eveline Widmer Schlumpf within four months strongly objected to Switzerland’s denial of information about account details of certain Indians at HSBC’s Swiss bank branches in whose cases Indian investigators have found “incriminating evidence of tax evasion”.
Mr. Chidambaram also wrote that the interpretation made by Switzerland that it can not share information as per India’s request was not in accordance with international standards. Switzerland had refused to share the said information through a letter dated April 7 to Mr. Chidambaram. The stated reason was that India initiated investigations on the “HSBC” accounts on the basis of information extracted from data a disgruntled HSBC employee had stolen in 2011. India had received this “stolen” data from France.
At the official level meeting in New Delhi in February, the Swiss delegation insisted on a pre-condition, according to Mr. Chidambaram’s letter, for providing the information India is seeking that India needs to demonstrate that the investigation carried out in these cases was independent if the HSBC data was based on information already available with the Indian authorities prior to receiving the HSBC data from France. This pre-condition, Mr. Chidambaram wrote, amounts to Switzerland providing protection to the tax evaders India is investigating.
India has stepped up pressure on the European nation which is considered a major safe haven for alleged black money stashed by foreigners owing to its strong banking secrecy laws. Under global pressure, Switzerland has agreed to ease its banking secrecy laws in recent years. India and Switzerland had signed a tax treaty in 2011 to facilitate greater flow of information about alleged black money. Mr. Chidambaram also reiterated in the letter that India would continue to take a position at the Global Forum about Switzerland lacking legal and regulatory framework for an effective exchange of tax-related information. In the letter dated April 29, the Finance Minister urged Switzerland to honour its “rights and duties” agreed in the bilateral Direct Tax Avoidance Convention (DTAC) with India.
