The visit of an Indian delegation to Switzerland to discuss tax issues has garnered a lot of media attention in both countries. While offering some concessions, Switzerland refused to budge on the issue of providing assistance on the basis of stolen bank data.
On Wednesday, the Swiss State Secretary for International Financial Matters, Jacques de Watteville, met with his Indian counterpart, Revenue Secretary Shaktikanta Das, to discuss various bilateral and multilateral tax and financial issues.
The meeting was a follow-up to a Swiss delegation's visit to New Delhi in February 2014. It was also the first high-level meeting between the two countries' tax and financial authorities since the new Indian government took up office in May this year.
The Le Temps newspaper seized on the visit to remark that it is not just the Americans and Europeans that are interested in catching their tax evaders. It also commented on the coincidental visit of an Israeli tax delegation next week to illustrate how Switzerland is being attacked from all sides over tax evasion.
The Swiss public broadcaster SRF, commented that Indian prime minister Modi's crusade against alleged Swiss-assisted tax evasion by Indians is just a successful ploy to distract attention away from the source of generous donations towards his election campaign.
The Indian media focused on the so-called HSBC stolen bank data that India is in possession of and which is regarded as inadmissible by Swiss authorities.
Stolen data stalemate
Despite pressure from India, Switzerland refused to compromise on its stance of refusing to entertain requests for banking information that are based on stolen bank data.
India has been looking into 782 names taken from a list of HSBC bank clients given to foreign authorities by former bank employee, Hervé Falciani, who worked at the bank’s Geneva branch.
According to a press release by the State Secretariat for Financial Matters, State Secretary de Watteville indicated that “Switzerland would be willing to examine requests for which investigations have been carried out independently from what the Swiss government considers as data obtained in breach of Swiss law.”
Despite a stalemate on stolen bank data, the Swiss have agreed to step up cooperation with India on tax evasion related matters. Adrian Hug, Director of the Swiss Federal Tax Administration, agreed to assist India in obtaining confirmation of the authenticity of bank documents obtained through “legal” means.
The Swiss authorities have also committed to speeding up the response by fixing clear timelines and furnishing reasons if requests for information are not dealt within the fixed timelines. The Indian authorities on their part have agreed to indicate which cases should be prioritised and provide additional information wherever they can.
De Watteville also gave assurances that Switzerland would commence talks with India with regard to an automatic exchange of information agreement at the earliest opportunity once it had completed updating its domestic procedures.
Switzerland recently endorsed the declaration on automatic exchange of information published by the Organisation for Economic Cooperation and Development (OECD) in May 2014. This includes implementing at some point in the future (most likely 2017 or 2018) a new global standard for automatic exchange of financial account information.