INDIA and Swiss Confederation on April 20, 2012 signed the Mutual
Agreement for liberal interpretation of the identity requirements for providing
information as per Article 26 of the Agreement for the Avoidance of Double
Taxation (DTAA) with respect to income as amended by the 2010 Protocol. The
latest agreement was signed by the JS, FT & TR, CBDT, Mr Sanjay Kumar Mishra
and Mr. Juerg Giraudi, Head of the Division of International Tax Affairs, Swiss
Federal Department of Finance, Switzerland.
After
approval of the Cabinet on 23rd March 2012, this Mutual Agreement has been
signed on 20th April, 2012 but the liberal interpretation to Article 26 of the
DIM as agreed upon in this Mutual Agreement will apply from the date on which
the amending Protocol which was signed on 30th August, 2010, has come into
effect i.e., 01.04.2011.
The key features of this agreement
are:
++ As per the existing treaty, the requesting State has to
compulsorily provide the name of the person under examination and the name of
the foreign holder of the information as part of the identity requirements
without which the information will not be shared by the other country. This was
a restrictive provision and not in line with the international
standards;
++
Switzerland, now, has agreed to provide liberal interpretation on the identity
requirements that it is sufficient if the requesting state identifies the person
by other means than by indicating the name and address of the person concerned,
and indicates to the extent known, the name and address of any person believed
to be in possession of the requested information;
++
This Agreement is beneficial to India because it gives liberal interpretation to
the identity requirements for exchange of information which India will be
seeking from Switzerland and is in line with international standards. The
conditions as clarified by Switzerland, will enable India to get information
even if we have only limited details regarding the person having bank accounts
in Switzerland.
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