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In an unusual move, Switzerland has strongly refuted the Central Bureau of Investigation (CBI) Director's statement that it was a tax haven. It has also termed the premier investigation agency's remarks about Indians being the largest depositors in secretive Swiss Banks as ‘uncorroborated' and ‘lacking evidence'.
The CBI chief, Mr A. P. Singh, had on February 13 said, “India in particular has suffered from the flow of illegal funds to tax havens such as Mauritius, Switzerland, Lichtenstein, British Virgin Islands, etc. It is estimated that around $500 billion of illegal money belonging to Indians is deposited in tax havens abroad. Largest depositors in Swiss banks are also reported to be Indians.”
Reacting to this statement, the Swiss Embassy in India said, “Switzerland is not a tax haven. There have been several speculations about the amount of wealth held by Indians in Swiss Banks. Such estimates and statistics lack evidence and are uncorroborated.”
It also clarified that the Swiss Government has been forthcoming in its co-operation with all foreign governments in the cases of tax evasion and tax fraud that have been presented within the framework of bilateral treaties. A Double Taxation Avoidance Agreement (DTAA) between India and Switzerland provides a legal framework within which administrative assistance can be sought, particularly in the cases of tax evasion or tax fraud, a statement issued by the Embassy added.
Focus on DTAA
The statement has specially focused on the DTAA to substantiate its claim. It said India and Switzerland entered into DTAA in November, 1994. This was revised in August 2010. The revised agreement came into effect from October 07, 2011.
By revision of the DTAA, the Swiss Government has conceded to administrative assistance also in the cases of tax evasion. This is completely in line with the current international standard as stipulated in the OECD Model Tax Convention on Income and Capital, Article 26, the statement said.
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