Mutual Agreement Between India and Swiss Confederation Signed for Liberal Interpretation of Identity Requirements for Providing Information Under DTAA.

Press Information Bureau

Government of India

Ministry of Finance

30-April-2012 15:07 IST

Mutual Agreement Between India and Swiss Confederation Signed for Liberal Interpretation of Identity Requirements for Providing Information Under DTAA

Mutual Agreement between the Competent Authorities of Republic of India and the Swiss Confederation 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 was signed on 20th April, 2012 by Mr. Sanjay Kumar Mishra, Joint Secretary, Foreign Tax & Tax Research division, Central Board of Direct Taxes (CBDT), Department of Revenue, Ministry of Finance for the Indian side 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 salient features of this mutual 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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