In a major boost for India and other countries seeking details on suspected black money stashed in Swiss banks, Switzerland has agreed to automatic exchange of information and mutual administrative assistance in tax matters with overseas authorities.
The development, which virtually pulls down the famed secrecy wall surrounding Swiss banks, would lead to Switzerland providing all forms of mutual assistance - exchange on request, spontaneous information sharing, tax examinations abroad, and assistance in tax collection.
Switzerland has been facing intense global pressure to cooperate with overseas authorities to share information about accounts in its Swiss banks, which have long been known to be misused by entities from across the world, including from India, for evading taxes in their local jurisdictions.
Buckling under the international pressure, Switzerland has signed OECD's Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The convention, which has now been signed by 58
countries, including India, provides for sharing of information and mutual cooperation among all its signatories.
Paris-based OECD (Organisation for Economic Cooperation and Development), is an international policy-advisory body that has formulates global tax standards to fight tax evasion and concealment of illicit funds.
According to latest official figures released by Swiss National Bank, total funds held by Indians in Swiss banks fell to a record low level of about Rs. 9,000 crore (1.42 billion Swiss francs) at the end of 2012, from about Rs. 14,000 crore (2.18 billion Swiss francs) a year ago.
The overall funds held in Swiss banks by entities from across the world also fell from $1.65 trillion to $1.5 trillion during 2012.