Swiss par panel gives nod to new tax treaty with India

Geneva/New Delhi, Jan 19 (PTI) A Swiss ParliamentaryCommittee has given the go-ahead to the revised tax treatybetween India and Switzerland that would eventually allowIndian government access to secret Swiss bank accounts ofIndian tax evaders.

The amendments to the treaty will now be placed beforethe Swiss Parliament for final approval.

Once the revised treaty gets the approval, Switzerlandwould provide administrative assistance to India to trackcases of tax evasion and tax fraud.

The development comes at a time when the Indiangovernment is under mounting pressure from Opposition partiesand the Supreme Court to reveal the names of individuals whohave stashed away black money overseas.

Swiss Parliament''s Committee for Economic Affairs andTaxes (CEAT) in a statement on Tuesday said it has receivedthe India-Switzerland double taxation treaty document andforwarded the same to the National Council.

CEAT, which has 25 members, is tasked with examining anddrafting advisory opinions on messages, parliamentaryinitiatives, and reports concerning economic and fiscalissues, according to Swiss Parliament''s official website.

Finance Minister Pranab Mukherjee and Swiss FederalCouncillor Micheline Calmy-Rey signed a "protocol" to amendthe double taxation agreement (DTA) in the area of taxes onincome on August 30, 2010.

As per an agreement between the two countries, theinformation exchange was to have taken effect on January 1,2011.

However, earlier this month, Switzerland''s Federal TaxAdministration department had said the protocol was still totake effect as they were yet to inform each other aboutextending the necessary approvals.

"In Switzerland the Parliament has not agreed upon theprotocol yet.

"The exchange of information will be applicable forinformation that relates to any fiscal year beginning on orafter the 1st January 2011, as soon as the protocol has beengiven effect," a department spokesperson had said.

The amended tax treaty would help the Indian governmentto seek information about illict wealth allegedly hidden inSwiss banks by Indians.

Earlier, the influential Swiss Bankers Association hadsaid they would not permit "fishing expeditions", indicatingthat indiscriminate trawling through bank accounts would notbe allowed.