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Switzerland found India’s data security and confidentiality laws “adequate” for entering into an automatic exchange of information pact, which will open a continuous access to details about alleged black money hoarders in once-all-secret Swiss banks. In a detailed notification and fact sheet published in its official gazette for introduction of “automatic exchange of information relating to financial accounts with India”, the Swiss government has also cited decisions by other financial centres like Liechtenstein and Bahamas to enter into similar pacts.
Besides, Switzerland also took note of the US tax authority, the Internal Revenue Service (IRS), recognising India among the countries that provide an “adequate degree” of data protection for mutual exchange of tax information.
The Swiss Federal Council, the top governing body of the European nation, in June ratified automatic exchange of financial account information with India and 40 other jurisdictions to facilitate immediate sharing of details about suspected black money even as it sought strict adherence to confidentiality and data security.
The implementation is planned for 2018 and the first set of data should be exchanged in 2019. The decision is not subject to any referendum which means there should be no further procedural delay in its implementation.
The notification follows hectic parleys between India and Switzerland for introduction of the AEOI (Automatic Exchange of Information) on tax matters under the guidance of G20, OECD and other global organisations.
Listing various changes to the tax laws and introduction of new laws for fighting black money stashed abroad as well as within the country, the Swiss government said, “The legal, administrative and technical framework for confidentiality and data security in India was deemed satisfactory by the Global Forum’s panel of experts.”
“All agreements concerning the exchange of tax information concluded by India contain a confidentiality clause which corresponds to that of the model OECD agreement,” it noted, while adding that the country’s Income Tax Act contain other confidentiality provisions as well.
The notification also referred to the personal data protection measures provided in other laws of the country, incoming the Informational Technology Act and the Right to Information Act.
Switzerland said the two countries have committed to improve the framework conditions for cross-border business activities to give a boost to international investment and financial services segments.