The Prime Minister expressed his concern over the issue of Black Money in Swiss Bank Accounts.He directed the Finance Minister Shri Pranab Mukherjee to hold a press conference soon to set the record straight as far as the government’s stand on the issue is concerned.
Defence Minister A K Antony on Thursday said there will be "no cover-up" in disclosing names of people who have Swiss bank accounts as the Government is committed to bring back all the money stashed abroad.
"Our Government is committed to bring all that money and find out the truth...We are determined to find out the truth.
That effort is on and we will not cover-up anything," he told reporters at the NCC Republic Day camp.
Antony was responding to queries about reports suggesting that black money related to defence deals was lying in banks in Switzerland.
India will soon get access to Swiss bank accounts. The new tax treaty signed by India with Switzerland has got the nod from a Swiss parliamentary committee.
The revised bilateral treaty will come into force soon.
The new terms of the amended Indo-Swiss tax treaty will allow Indian authorities to get information on accounts more easily.
But this new treaty will only act as a deterrence to future tax evasions. Though it will be tougher to get information on old transfers.
ndia and Switzerland Sign Double Taxation Avoidance Agreement
A protocol amending the existing Double Taxation Avoidance Agreement was signed here today between Republic of India and Swiss Federal Council. The Signing ceremony was held at the Ministry of Finance, North Block, New Delhi. The protocol was signed for the Republic of India by Shri Pranab Mukherjee, Finance Minister while the Swiss Federal Council Foreign Minister, Ms. Micheline Calmy-Rey signed for the other side. Shri Ashok Chawla, Finance Secretary, Shri Sunil Mitra, Revenue Secretary, Dr. Kaushik Basu, Chief Economic Advisor from Indian side and Ambassador Philippe Welti, Ambassador George Marlin amonth others were present from Swiss side.
Text of the Statement made by FM in Reply to: Lok Sabha and Rajya Sabha Regarding Protocol for Avoidance of Double Taxation between India and Switzerland
Union Finance Minister, Shri Pranab Mukherjee made a statement in both the Houses of Parliament i.e., Lok Sabha and Rajya Sabha today on the Protocol signed between India and Switzerland yesterday to amend the existing Agreement and Protocol for Avoidance of Double Taxation with respect to Taxes on Income. Text of the statement is given below:
“Yesterday the Republic of India and the Swiss Federal Council have signed a Protocol which will amend the existing Double Taxation Avoidance Agreement between the two countries (DTAA). The amended DTAA shall come into operation after it enters into force on completion of internal process by Switzerland side.
Salient features of this Protocol are:
Article on Exchange of Information has been amended to bring it in line with international standards
· Under the current DTAA between India and Switzerland, India has not been able to obtain banking information from Switzerland. The protocol now seeks to amend the Article concerning Exchange of Information to enable exchange of such information.
· Information which is foreseeable relevant for carrying out the provisions of this agreement or to the administration or enforcement of the domestic laws concerning taxes can be exchanged under the DTAA, whereas earlier information which was relevant only for carrying out the provisions of DTAA could be exchanged.
· Information exchanged is to be used for tax purpose only. However, the new Article also provides for use of information by such other purposes which are allowed under the laws of both States and the competent authority of the supplying State authorizes such use.
· There is a specific provision to ensure that information will be exchanged even if there is no domestic interest.
· There is a specific provision for providing banking and ownership information.
· The new provision will be applicable only for prospective information and not for past information.
At present the income from international shipping are not covered under the DTAA. This is now sought to be included in the DTAA by providing for residence based taxation for shipping income from international traffic.
Our earlier treaties used to cover tax sparing provisions where if the income is exempt in one country, the other country used to provide corresponding relief even if such taxes are not paid due to exemption. However, India no longer supports this method and is moving away from profit based exemption. Tax sparing (to the extent of 10% of interest income) is currently there in the existing DTAA. Therefore, it is sought to be deleted in the Article concerning elimination of double taxation.
Article on Non-discrimination is sought to be amended to provide that difference in tax rate of resident taxpayer and Permanent Establishment of non-resident tax payer should not be more than 10%.
Recognised pension fund or scheme is included in the definition of resident to enable them to get benefit of the DTAA.
A provision for Limitation of Benefit is sought to be introduced to prevent misuse of treaty benefits on dividend, interest, royalty, fee for technical services and other income.”
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