India will receive the 4th set of Swiss bank account details

New Delhi/Bern:

India has received its fourth set of Swiss bank accounts from its nationals and organizations as part of an annual automatic information exchange in which Switzerland has shared details of nearly 34,000 financial accounts with 101 countries.

Officials said the new details shared with India relate to “hundreds of financial accounts,” including many instances of multiple accounts linked to some individuals, companies and trusts.

They gave no details, citing the confidentiality clause of the information exchange and the negative impact it could have on further investigations, but claimed the data was being used extensively in investigations into alleged tax evasion and other wrongdoings, including money laundering and terrorism Financing.

In a statement on Monday, the Swiss Federal Tax Administration (FTA) said five new members were added to the list in this year’s information exchange – Albania, Brunei Darussalam, Nigeria, Peru and Turkey. The number of financial accounts increased by almost a lakh.

While exchanges with 74 countries were reciprocal, Switzerland received information but did not provide information in the case of 27 countries, including Russia, either because these countries do not yet meet international requirements for confidentiality and data security or because they have made up their minds not to get them data.

While the FTA did not disclose names and other details of all 101 countries, officials said India figures prominently among those who have received the information for the fourth straight year and the details shared with Indian authorities relate to a large number of individuals and organizations accounts with Swiss financial institutions.

The exchange took place last month and the next information would be shared by Switzerland in September 2023, the officials added.

In September 2019, India received the first data from Switzerland as part of the AEOI (Automatic Exchange of Information). It was among 75 countries receiving such information this year. Last year, India was among 86 such partner countries.

According to experts, the AEOI data received from India has been very useful to launch a strong criminal prosecution against those who have unrecorded assets as it provides full details of deposits and remittances and all income including through investments in Securities and Other Assets .

On condition of anonymity, officials said the details mainly related to businessmen, including non-resident Indians, who have now settled in several Southeast Asian countries, as well as the US, Britain and even some African and South American countries.

Switzerland had agreed to the AEOI with India after a long process, including a review of the necessary legal framework in India on data protection and confidentiality.

The information exchanged includes identification, account and financial information, including name, address, country of residence and tax identification number, as well as information about the reporting financial institution, account balance and investment income.

Also this year, Swiss authorities have already shared information on more than 100 Indian citizens and entities after receiving requests for mutual assistance in cases involving financial wrongdoing, including tax evasion, the officials added. This number has remained almost the same in recent years.

These cases mainly relate to older accounts, which may have been closed before 2018, for which Switzerland shared details with India as part of a previous administrative assistance, as the Indian authorities had provided prima facie evidence of tax misconduct by these account holders. The AEOI only applies to accounts that are active or were closed in 2018.

Some of these cases relate to entities established by Indians in various overseas jurisdictions such as Panama, British Virgin Islands and Cayman Islands, while the individuals mainly include businessmen and some politicians and former royalty and their family members.

However, officials refused to give details on the exact number of accounts or the amount of assets held in the accounts of Indians for whom information was shared with India, citing strict confidentiality clauses governing the exchange framework.

The information exchanged allows tax authorities to verify that taxpayers have correctly reported their financial accounts on their tax returns.

Switzerland also agreed last year to share details of foreigners’ real estate assets there, but the information on contributions to charities and other such foundations, as well as details on investments in digital currencies remain exempt from the AEOI framework.

This is seen as an important milestone in the Indian government’s fight against allegedly hidden black money abroad, as the authorities will be able to obtain full information on Indian homes, apartments and condominiums in Switzerland, as well as the income from such properties ask him to investigate the tax liabilities associated with these assets.

The move gains momentum on the part of Switzerland, which is scrambling to reposition itself as a major global financial center while warding off long-held perceptions that the Swiss banking system is a supposed safe haven for black money.

Experts and people concerned with attracting investments in Switzerland believe the move would also help dispel misconceptions that all money inflows into Swiss assets are illegal and would go a long way in promoting Switzerland as a to establish a preferred investment target, also for real estate.

The FTA said around 9,000 reporting financial institutions (banks, trusts, insurance companies, etc.) collected the data and submitted it to the government.

The FTA sent information on around 34,000 financial accounts to the partner states and received information on around 29,000 financial accounts from them.

“The FTA cannot provide any information about the amount of the financial investments,” she added.

The first such exchange in Switzerland took place at the end of September 2018 and involved 36 countries, but India was not on the list at the time.

The Global Forum of the Organization for Economic Co-operation and Development (OECD) reviews the implementation of the AEOI.