Switzerland has ratified the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (Administrative Assistance Convention).
The move marks a significant step in the continuing global efforts to crackdown on illicit fund flows in the system and do away with banking secrecy practices.
The instruments of ratification for this Multilateral Convention were deposited with Paris-based OECD. The Organisation for Economic Cooperation and Development (OECD) sets the global tax standards and the convention has been prepared by it.
In this way, Switzerland is fleshing out its commitment to implementing international standards in the area of taxation.
Switzerland would start implementing the convention from January 1, 2017.
It would be applicable for the exchange of information in tax matters in accordance with the rules of the convention and corresponding instruments for implementation.
The OECD and Council of Europe convention provides a legal framework for tax-related cooperation between countries.
So far, more than 100 jurisdictions have signed the convention.
The convention was signed by Switzerland in October 2013 and then approved by Parliament in December 2015.
Background:
In efforts to clamp down on the black money menace, India has been seeking tax information from various countries, including Switzerland.
It will pave the way for the automatic exchange of tax information with India and other nations.
