Switzerland to share third set of information on Swiss bank accounts of Indian nationals this month
India will obtain the third set of Swiss bank details of its nationals this month as part of an automatic exchange of information pact with Switzerland and this will include for the first time data on real estate properties held by Indians there, officials said on Sunday.
Marking a key milestone in the Indian government’s fight against black money allegedly hidden abroad, India this month will get comprehensive information on Indian-owned apartments, flats and condominiums in Switzerland as well as income from these properties to help it review tax obligations. associated with these assets.
This move is growing in importance on the part of Switzerland as well as the European Alpine nation as it strives to reposition itself as a key global financial center while avoiding the lingering perception that the Swiss banking system is a supposed safe haven. for black money. Although this is the third time that India will obtain details of bank accounts and other financial assets held by Indians in Switzerland, it will be the first time that information shared with India will include information on real estate assets.
While the Swiss government has agreed to share details of real estate assets, information about contributions to nonprofits and other foundations, as well as details about investments in digital currencies still remain out of reach of the scope of automatic exchange of information, officials mentioned. Experts and those looking to attract investment to Switzerland said the move would help dispel misconceptions about the illicit nature of all fund flows into Swiss assets and go a long way in making Switzerland an investment destination. privileged, including for real estate.
Himanshu, Founder and CEO of Switzerland For You SA, the parent company of IDDI Investments, which deals with attracting investments from India and other countries to Switzerland, including in startups and real estate, said transparency has its own virtues and the Swiss government’s proposal to share information on foreign clients’ real estate ownership with other countries, including India, is welcome. “We can find no valid reason for the Swiss authorities to withhold such information. After all, ownership of property is not something that can be kept secret,” said the Indian-born entrepreneur who did not only bears his first name and who is based in Geneva. for many years.
“Sharing this information with other countries as part of the AEOI will bring more transparency and deter those who intend to buy Swiss properties from ill-gotten wealth. Switzerland an attractive investment destination “, he added. . India had received the first set of details from Switzerland under AEOI (Automatic Exchange of Information) in September 2019. It was among 75 countries to have obtained such information that year. In September 2020, India received the second set of Swiss bank details from its nationals and entities, as well as 85 other beneficiary countries with which the Swiss Federal Tax Administration (FTA) exchanged financial account information in the framework of global AEOI standards last year. .
Starting this year, the Swiss Federal Council, the country’s highest governing body, decided to implement a key recommendation of the Global Forum on Transparency and Exchange of Information for Tax Purposes, under which Swiss authorities will also share details of investments made by foreigners in the Swiss Real Estate Sector. However, some other recommendations of the Global Forum, including on sharing information on digital currency accounts and contributions to foundations and nonprofits, have not yet been accepted and, therefore, these details would not be shared by Switzerland with India or any other country. for the moment.
Intense lobbying is underway globally to convince Switzerland to also start sharing information on digital currency accounts and contributions made to non-profit entities. In each of the past two years, Switzerland has shared details of nearly three million financial accounts with various jurisdictions, while the number is expected to be higher this year.
Over the past two years, India has been one of the main countries with which Switzerland has shared details of the financial accounts of clients of Swiss banks and various other financial institutions, while it is also expected to be listed in good place this year when it comes to real estate details. . Resident and non-resident Indians, as well as Indian businesses, are said to be a significant number in the overall list of people in this year’s Switzerland’s information exchange, officials familiar with the development said.
In addition, Swiss authorities have already shared information on more than 100 Indian citizens and entities so far this year after receiving requests for administrative assistance in cases involving investigations of financial malfeasance, including evasion. tax, officials added. This number has been similar in recent years. These cases mainly concern older accounts that could have been closed before 2018, for which Switzerland shared details with India under an earlier framework of mutual administrative assistance, as Indian authorities had provided evidence. prima facie tax-related wrongdoing on the part of these account holders. AEOI only applies to accounts active or closed in 2018.
Some of these cases involve entities created by Indians in various overseas jurisdictions such as Panama, the British Virgin Islands and the Cayman Islands, while the individuals mainly include businessmen and a few politicians and former members of the the royal family as well as members of their families. Officials, however, declined to share details on the exact number of accounts or the amount of assets held in accounts held by Indians, for which the information was shared with India, citing strict confidentiality clauses governing the framework. exchange.
Information shared by Swiss authorities includes identifying, account and financial information, such as name, address, country of residence and tax identification number, as well as information regarding the reporting financial institution. , account balance and capital income. The information exchanged enables the tax authorities to check whether taxpayers have correctly declared their financial accounts in their tax returns.
The 86 countries covered by AEOI in 2020 included 11 new jurisdictions – Anguilla, Aruba, Bahamas, Bahrain, Grenada, Israel, Kuwait, Marshall Islands, Nauru, Panama and the United Arab Emirates – in addition to a list of 75 countries. , with whom information was shared in 2019. 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 that time.
Nearly 10,000 entities, including financial institutions such as banks, trusts and insurers, as well as associations of condominium and apartment owners, are expected to have shared information about their foreign clients with the Federal Authority of Swiss taxes for subsequent sharing with foreign jurisdictions. Switzerland is committed to adopting the global standard for the international automatic exchange of information in tax matters. The legal basis for the implementation of AEOI in Switzerland entered into force on January 1, 2017.
However, AEOI only applies to accounts that are officially in the name of Indians and they may include those used for business and other bona fide purposes. The World Forum of the Organization for Economic Co-operation and Development (OECD) reviews the implementation of the AEOI.
According to experts, the AEOI data received by India has been very helpful in building a strong case for prosecutions against those with unrecorded wealth, as it provides full details on deposits and transfers as well as all income. , including through investments in securities and other assets. On condition of anonymity, several officials said the details mainly concerned businessmen, including non-resident Indians now settled in several Southeast Asian countries as well as the United States, the United Kingdom. United and even in some countries of Africa and South America.
A Swiss delegation was in India in August 2019 before the first details could be shared and the two sides also discussed possible measures to expedite the execution of tax information sharing requests made by India in specific cases. . It is feared that many Indians closed their accounts after a global crackdown on black money led Switzerland to bow to international pressure to open its banking sector to scrutiny in order to dispel the perception of long date that Swiss banks are a safe haven for undisclosed funds.
Switzerland accepted AEOI with India after a long process, including a review of the necessary legal framework in India on data protection and privacy.