India receives first chunk of Swiss bank account details of its nationals

India has acquired first list of Swiss bank account specifics of its citizens under a new automatic information exchange pact, an utmost milestone in the government’s battle against black money hoarded overseas.

India is among 75 nations with which Switzerland’s Federal Tax Administration (FTA) has shared informations on financial accounts within the substructure of global standards on Automatic Exchange of Information (AEOI), an FTA spokesperson told PTI.

The next exchange would take place in September 2020, the spokesperson added.

This the the first time that India has obtained details from Swiss authority under the AEOI structure, which gives for exchange of information on financial accounts, currently active as well as those that were shut in 2018, the year in which the structure agreement came into play.

The information shared is determined by strict confidentiality provisos, and the FTA official declined to set forth specifics on the number of accounts or about the quantum of financial assets associated with the Indian clients of Swiss bank.

However, the AEOI only recounts to accounts that are in the name of Indian nationals and that might include those used for business and other perposes.

The FTA has sent information on approximately 3.1 million accounts to the partner nations and recieved informations on around 2.4 million from them.

The exchanged informations includes indentification, account and financial information. This
incorporates names, address, state of residence and tax identification number, as well information regarding the financial institution, account balance and capital income.

Independently, the Swiss government stated in a statement that the number of nations with which AEOI has taken place this year is 75, out of which there was cohesiveness with 63 nations.

12 nations, Switzerland obtained information but did not give any are Belize, Bulgaria, Costa Rica, Curacao, Montserrat, Romania, Saint Vincent and the Grenadines and those who didn’t recieve any data are Bermuda, British Virgin Islands, Cayman Islands, Turks and Caicos Islands.

The data was collected by the FTA from 7,500 institutions which includes banks trusts and insurers.

"The largest exchange was with Germany, as was the case in the previous year. The FTA cannot provide any information on the amount of financial assets," the statement added.

When asked about details relating to India, the FTA spokesperson stated, "the communication of statistical data is subject to the confidentiality clauses as well."

To another question on the next exchange of information with India, the spokesperson stated,"according to the international agreement in place, the exchanges have to take place within nine months after the end of the respective calendar year. This means the exchange takes place in September, except for corrections."

The Swiss government stated Switzerland has committed itself to embracing the global norms for the automatic exchange of infos in tax issues.

The implementation of the AEOI in Swizerland first came into effect on 1st January, 2017.
"The exchanged information allows the cantonal tax authorities to verify whether taxpayers have correctly declared their financial accounts abroad in their tax returns," the FTA said.

It stated the exchange will happen with nearly 90 nations next year, the first of its kind happened in September 2018 with 36 nations.

The Global Forum of the Organisation for Economic Cooperation and Development reviews the AEOI execution.

As per the experts, the information obtained by India can be quite useful for corroborating a strong prosecution case against those with unaccounted wealth, as it gives full details of deposits and transfers as well as of entire income, including through investments in security and other assets.

On order of anonymity, many official stated the details relate mostly to businessmen, non resident Indians now settled in several countries across the globe.

Other than that, there are at least 100 cases of older accounts held by Indians that might have been shut before 2018, for which Swiss authority is in process of sharing details with India under an early framework of mutual administrative assistance as Indian authorities had given them evidence of tax related crime by those account bearer.

This pertains to people in businesses like auto components, chemical, textiles, real estate, jewellery and steel commodities.

It is feared many might have shut their accounts after a global crackdown on black money led by Swiss authorities. Switzerland agreed to AEOI with India after a lengthy process, including review of legal work in India on data protection and confidentiality.