Switzerland to tax wealth stashed away by Indians

Switzerland today agreed to partially meet India's demand for information on money stashed away in Swiss bank accounts, saying that it would amend the country's laws to tax such accounts on India's behalf, while protecting the identity of the account holders

"We will amend the double taxation treaty to include tax evasion to prevent misuse," Phillippe Welti, Swiss ambassador to India, told a news channel.

Once the laws are in place the Swiss banks will tax the wealth on behalf of Indian and other foreign governments as an alternative to the sharing of information.

Swiss banks have mooted the idea of a 'universal withholding tax' - wherein they would tax the earnings generated from the wealth of foreigners deposited with them and transfer the proceeds to the governments of the concerned country.
 
The amendments could open a floodgate of black money as Indian authorities will be able to access data on tax evaders.

Swiss Banks Association (SBA) had earlier denied permission to alow Indian authorities to go on what it called fishing expeditions or indiscriminate trawling through bank accounts in search of rogue deposits.

The ambassador, however, did not give a timeframe for the amendment, but said an agreement could be possible by the year-end. Phillippe said it was a matter between the two governments.