Amid a debate on disclosure of names of suspected black money holders, Switzerland on Thursday said information exchanged under the Swiss-India tax treaty cannot be disclosed “in principle” to a court or any other body outside the proceedings of a “specific and relevant” case.
The comments come at a time when a Supreme Court-monitored Special Investigation Team is probing alleged stashing of black money by Indians abroad, including Swiss banks. Switzerland, long accused of being a safe haven for illicit funds, has promised to extend assistance to India and reply to requests for information in a “time-bound” manner on cases of alleged tax evasion and financial crimes, or provide a reason if no information can be shared.
Explaining the treaty provisions about disclosure of such ‘secret’ information, a Swiss Finance Ministry spokesperson said that authorities from the two countries are having “regular contacts on bilateral tax matters” but refused to comment on particular cases.
The government on Wednesday gave to the Supreme Court a list of 627 Indians with accounts in a Swiss branch of HSBC bank, on which probe for suspected black money is underway. While this list was given in ‘sealed envelopes,’ three other names were made public a day earlier as prosecution had been launched against those persons.
There has been a debate on whether disclosure of names, without prosecution, could violate tax treaties.
Replying to queries in this regard, the Swiss Federal Department of Finance spokesperson said that the protocol to Swiss-Indian DTA (Double Taxation Agreement) states that any information received “by a contracting state shall be treated as ‘secret’ in the same manner as information obtained under the domestic laws of that state.” The treaty further provides that any such information “shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of (information), the enforcement or prosecution in respect of, or the determination of appeals in relation to the taxes... or the oversight of the above.”
The Swiss Finance Ministry spokesperson further said the treaty states that “such persons or authorities shall use the information ‘only’ for such purposes. They may disclose the information in public court proceedings or in judicial decisions.”
“Accordingly, the information exchanged under the terms of the DTA can be provided to a Court in situations where it is dealing with a specific case related to tax matters for which this information is relevant. Conversely, information cannot be disclosed in principle outside of such proceedings,” the official added.
The spokesperson, however, declined to comment on “particular cases,” citing the confidentiality provisions of the Swiss-Indian DTA.
