Details being sought on some accounts held by Indians in HSBC’s Swiss branches
Taking a strong stance, India has warned Switzerland that reluctance to share tax related information may impact economic co-operation between the two countries.
India is pursuing Switzerland to share information on certain accounts held by some Indians in HSBC’s Swiss bank branches. These were account details of those against whom cases of ‘incriminating evidence of tax evasion’ have been found here.
But, the Swiss authorities have been reluctant to share information. This led to the Finance Minister P Chidambaram writing a strongly worded letter to the Swiss Finance Minister Eveline Widmer Schlumpf.
“Effective exchange of tax related information is an extremely important constituent of the economic co-operation between India and Switzerland and the rights and duties agreed to in the DTAC (Double Taxation Avoidance Convention) between our two countries in regard to such exchange of information should be fully understood and honoured by Switzerland,” Chidambaram’s letter dated April 29. Chidambaram’s letter was in reply to Swiss Minister’s letter sent on April 7.
Chidambaram reiterated that India would continue to take a position at the Global Forum about Switzerland lacking legal and regulatory framework for an effective exchange of information. He also said that Switzerland’s interpretation that it cannot share information as per India’s request was not in accordance with international standards.
Under global pressure, Switzerland has agreed to ease its banking secrecy laws recently and it also signed a revised tax treaty with India in 2011 to facilitate greater flow of information about alleged black money.
However, it has refused to share information about the accounts mentioned in the so-called ‘HSBC list’ which India had received from France through a bilateral treaty.
France had received that list after data was stolen by a disgruntled HSBC employee in 2011 and those names eventually found their way to the tax authorities across the world including India.
The Finance Minister further said Switzerland was putting unusual pre-conditions for sharing information which appear to be ‘intended to refuse assistance’ and such refusal amounts to Swiss authorities providing protection to the people ‘found to have evaded Indian taxes’.
Switzerland has rejected India’s request on the pretext that the information was being sought on the basis of stolen data and it claims that its local laws do not permit exchange of information in such cases where some criminality may be involved for getting the data.
Countering Switzerland’s claims, Chidambaram said that India’s request “is based on data obtained legally under a DTAC with a third country and India is not party to commission of any criminal offence in Switzerland in this regard.”