The revised Indo-Swiss tax treaty, which will allow India to seek secret bank account details from January 1 this year, is expected to be approved without a national referendum in Switzerland, a top Swiss official said.
“By October, it will be clear whether we will have a referendum or not... I have a strong feeling that by October 6, we will be able to say that there will be no referendum.
“... My feelings tell me that there will be no need for a referendum,” Swiss Ambassador to India Philippe Welti told PTI in an interview.
Revised Double Taxation Avoidance Agreement
The revised Double Taxation Avoidance Agreement (DTAA) between the two nations, that would allow India to seek details about its citizens having unaccounted money in Swiss banks, was approved by Switzerland’s Parliament on June 17.
After ratification by Parliament, the treaty is open to scrutiny by Swiss people for 100 days, which ends on October 6. If there is an opposition to the agreement, then the same would be subject to a national referendum.
“If I am proven right, it means that after October 7, we will inform the Indian government that we (Swiss government) are ready for exchange of information,” Mr. Welti said.
Debate over black money
Amid raging debate over the issue of black money stashed overseas, latest figures from Swiss National Bank show that total deposits of Indian individuals and companies with all the Swiss banks was collectively about $2.5 billion at the end of 2010.
Responding to a query on when the banking information can be sought from Switzerland, Mr. Welti said that assuming the DTAA is ratified before the end of this year, Indian government has a slight advantage.
“... they (Indian government) can file requests which concern revenues that have been generated from January 1, since our financial year starts earlier,” he pointed out.
Bank account details
India can seek bank account details for cases dating from January 1, 2011, provided the treaty coming into effect this year.
In Switzerland, the financial starts from January 1.
India had inked an agreement with Switzerland to revise the DTAA in August 2010. Once in force, the treaty would allow India to seek information for cases related to tax evasion also.
Under the existing treaty with Switzerland, India could only seek bank information related to tax fraud cases.
Mr. Welti said that requirements for asking bank information has been relaxed by Switzerland.
“Switzerland in the past had the reputation of being very strict in terms of acceptability of documents.
“From the technical point of view, it has now become easier to file requests because Swiss government has relaxed technical requirements for requests,” Mr. Welti noted.
Black money has become a politically hot topic and the Indian government is under intense pressure from the Supreme Court as well as the Opposition to track down illegal wealth stashed away by Indian entitites in foreign shores including Swiss banks.