"The information sharing will take place from the first day of the next financial year, January 1, 2012 for Switzerland and April 1. 2012 for India," M Ganapathi, Secretary (West), Ministry of External Affairs said in Vienna. The protocol amending the Double Taxation Avoidance Agreement between India and Switzerland was signed in New Delhi on August 30 this year. The Swiss Parliament had approved the protocol in June and placed it for 100-day waiting period, for public objections, if any.
One of the most crucial sections of the agreement on the issue of tax related matter is Section 26 which deals with exchange of information. The initial double taxation avoidance agreement between the two countries was signed on November 2, 1994. It was subsequently amended and a supplementary protocol signed in Delhi on February 16, 2000.
The revised treaty would allow India to access tax related information from the Swiss authorities with a prospective effect. In Switzerland, after amending protocol to the DTAA is introduced in Parliament, it has to wait for 100 days before it comes up as a ratified document. There after there will be exchange of letter between Switzerland and India.
Ganapathi said Swiss authorities informed President Pratibha Patil during her just concluded state-visit to the country that the entire process of ratification would take place soon. Switzerland has one of the world`s toughest secrecy laws when it comes to banking sector. Many across the world have opened accounts in Switzerland, which is said to provide an almost faceless banking. Banks within Switzerland are legally bound to keep any and all information about their customers purely private.
Secrecy guidelines tend to be vigorously enforced through the banking industry. But now the tide seems to be reversing. Governments across the globe are in talks with Switzerland to get their hands on account holders.