Geneva: Swiss banks are working at “full speed” to implement the automatic tax information exchange regime that will help India’s efforts to crackdown on illegal wealth stashed by its citizens in Switzerland. The Alpine nation, known for banking secrecy practices, has come under international pressure amid various countries including India stepping up their fight against the black money menace.
India is probing hundreds of its citizens for suspected stashing of unaccounted wealth in Swiss banks and their names are part of a much longer list of account holders in HSBC’s Geneva branch which was ‘stolen’ by a former bank employee. The list later found its way to the French government, which had shared the relevant names with India.
As part of global efforts to curb flow of illegal funds in the financial system, Switzerland has agreed to be part of the automatic tax information exchange framework, which is expected to be in force from 2017. The leading Swiss bankers’ grouping SBA today said its members are working at “full speed” for implementation of the Automatic Exchange of Information in tax matters (AEOI).
Under this framework, Switzerland would share information with India and various other countries. Once this regime is in place, Swiss banks would start collecting information on bank accounts and securities portfolios held by taxpayers domiciled for tax purposes in AEOI partner states. The information gathered would then be provided to the Swiss Federal Tax Administration (FTA), which would share it with partner states.
In its annual Banking Barometer report, the Swiss Bankers Association (SBA) said banks are working on the “practical implementation” of the future standard. Legal basis need to be put in place for Swiss banks to exchange tax-relevant information and in this regard, the Swiss Federal Council has submitted the dispatch for implementing AEOI framework to the Parliament in June.
“Parallel to this, the Swiss banks are now working on the practical implementation of the future standard through large-scale projects,” SBA said. So far, Switzerland has signed an agreement on the introduction of the AEOI with the European Union besides a joint declaration with Australia. Further agreements are currently being negotiated.
“In the first half of 2015, Switzerland reached its first agreements for the automatic exchange of information in tax matters (AEOI). Negotiations for further agreements are currently underway,” SBA noted.