The Swiss banking regime is in the news again with the announcement that Switzerland finally decided to sign, on October 16, the Organisation for Economic Co-operation and Development-sponsored Multilateral Convention on Mutual Administrative Assistance that provides for a liberal exchange of information between countries on potential money launderers and tax dodgers.
As usual, appearances are deceptive. Switzerland will not be subject to a liberalised information exchange regime without a further discussion in and eventual ratification by the Swiss parliament. Therefore, the scope and timing of Switzerland's participation in a regime that enables transparent exchange of information remain uncertain.
Until then, in order to access information on Indian-source money stashed by tax dodgers and money launderers in Swiss banks, India has to depend on the double taxation avoidance agreement (DTAA) that went through certain revisions in 2000 and 2010. The original and revised versions present a fascinating insight into, on the one hand, the evolution of India as a country attractive to foreign investment and, on the other hand, India's traditional obsession with untaxed money in Swiss banks.The article then provides a nice summary of the events leading to this new agreement and the immediate effect of the new agreement.