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Black money estimates lack proof: Switzerland

Press Trust of India
Feb 16, 2012 at 06:07pm IST

New Delhi: Days after CBI Chief's statement that Indians are the largest depositors in Swiss banks, Switzerland on Thursday said such estimates and statistics lack evidence and are uncorroborated.

In an unusual step, the Embassy of Switzerland here issued a press release saying, "it wishes to make a clarification in view of unsubstantiated media reports that have been recently published about Switzerland and Swiss Banks."

But, the release, which did not mention CBI Chief's statement, said that Switzerland is not a tax haven.

Black money estimates lack proof: Switzerland

CBI Director AP Singh had said around $500 billion of illegal money belonging to Indians is deposited in tax havens abroad.

"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 said.

At an Interpol programme here on February 13, CBI Director AP Singh had 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."

Without indicating the source of the estimate of the illegal Indian money abroad, he had said India, in particular, has suffered from the flow of illegal funds to tax havens such as Mauritius, Switzerland, Lichtenstein and British Virgin islands.

While there have been various estimates of Indian black money stashed abroad, the statement by the CBI Director was significant that for the first time someone in authority in the country had come out with an estimate.

"The Swiss government has been forthcoming in its co-operation 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 release said.

The Double Taxation Avoidance Agreement (DTAA) between India and Switzerland provides a legal framework within which administrative assistance can be sought in particular cases of tax evasion or tax fraud, it added.

The DTAA was revised in August 2010 and came into force on October 7, 2011. The revised treaty allows for exchange of information on tax fraud as well as on tax evasion cases.

The earlier treaty did not include tax evasion, but only tax fraud.

Swiss law makes a distinction between tax fraud and tax evasion.

According to the release, the provisions of the revised agreement apply in India to income originating in tax years which start on or after April 1, 2012.

In Switzerland, they apply to income originating in tax years which begin on or after January 1, 2012.

"In the case of the exchange of information, the provisions apply to information referring to tax years which start on or after January 1, 2011," the release noted.

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