India and Switzerland sign bank information sharing deal

Cracking down on "black money" has been Indian Prime Minister Narendra Modi's key priorities Keystone

The two countries have signed a joint declaration that will ensure that financial information on accounts held by Indians in Switzerland and vice versa will be shared annually. The first sharing of data is expected to begin from 2019 onwards. 

On Tuesday, India joined a list of select countriesExternal link with which Switzerland will commit to an annual exchange of all financial information automatically on a reciprocal basis for tax purposes. India has been lobbying hard to be a part of this initiative in a bid to prevent its citizens from stashing undeclared funds in Swiss banks. It finally managed to convince the Swiss authorities that it will respect Switzerland’s tradition of banking secrecy by respecting confidentiality of account holders and using the data for tax purposes only. 

“India meets in particular the high demands in terms of adherence to the principle of speciality [only for tax purposes] and the safeguarding of confidentiality for the data delivered, which are prerequisites for the introduction of the AEOI,” said a government statement released on Tuesday. 

The Swiss cabinet has authorised the Federal Department of Finance to initiate a consultation process on the inclusion of Indian and other countries in the AEOI partnership. After this consultation, the corresponding federal decrees will be submitted to the parliament for approval. 

It is expected that India and Switzerland will begin collecting data from 2018 and exchange information from 2019.