According to various official and unofficial estimates, Indians are accounted among the largest beneficiaries of black money deposited in tax havens off-shore. Apart from Switzerland, there are several other off-shore ill-gotten money destinations.
However, Switzerland chose to rebut the allegation claiming, “such estimates and statistics lack evidence and are uncorroborated,” in response to India’s Central Bureau of Investigation Director, A.P Sinha’s statement that Indians are the largest depositors of illegal money in Swiss banks.
In a press statement released from Swiss Embassy in New Delhi, it was stated that the clarification was sought to be made “in view of unsubstantiated media reports that have been recently published about Switzerland and Swiss banks”.
The statement further clarified: “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”.
While not referring to the CBI Director’s statement, the Swiss response was swift and close on the heels of the first Interpol Global Program on anti-corruption and asset recovery where Mr. Singh said: “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.”
Further clarifying the Swiss position on tax evasion and tax fraud, the statement noted: “The Swiss government has been forthcoming in its cooperation with all foreign governments in cases of tax evasion as well as cases of tax fraud, that have been presented within the framework of bilateral treaties”
The bilateral treaty between India and Switzerland, the Double Taxation Avoidance Agreement (DTAA), provides the framework within which Indian authorities can seek administrative assistance against tax evasion or fraud. The revised DTAA that came into force in October 7, 2001 further strengthens the bilateral treaty by including “tax evasion” while the earlier treaty included only “tax fraud”. According to the statement issued by the Swiss embassy, the revised bilateral agreement was applicable in India to tax years beginning on or after April 1, 2012.
Recently, the Supreme Court of India had appointed a committee to report on the quantum of Indian black money stashed away off-shore. The committee had submitted its report, which was the source on the basis of which the CBI director, Mr. Singh is stated to have claimed that US $500 billion Indian black money was stashed away in Swiss banks. According to wikileaks, a majority of the account holders in Swiss banks are Indians.
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