Moving closer towards doing away with banking secrecy practices, Switzerland has started ground work for implementation of automatic exchange of information on tax matters.
Switzerland, known for strong banking secrecy rules, had agreed to proposed new standard for automatic exchange of tax information earlier this month.
The draft negotiation, which mandates for introduction of the new global standard on automatic exchange of tax information, was approved by the Swiss Federal Council today.
"The introduction of the automatic exchange of information with foreign countries would be conducted by means of separate bilateral agreements with the partner countries," the Swiss government said in a statement.
It noted that existing legislation excludes automatic exchange of information.
Earlier this month, Switzerland, India and 45 other nations had agreed upon automatic exchange of tax information, which is seen as a major step forward in global efforts against banking secrecy practices.
The move also came as a boost for India, which has stepped up efforts to track down alleged illicit funds stashed away by Indians in overseas jurisdictions, including Switzerland.
The endorsement of the 'Declaration on Automatic Exchange of Information in Tax Matters' under the aegis of think-tank OECD earlier this month had paved the way for finalising a single global standard in this regard later this year in September.
Paris-based Organisation for Economic Cooperation and Development (OECD) sets the global tax standards and frames conventions against tax frauds, among others.
With regard to implementation of automatic information exchange, the Swiss government today said that in the initial phase priority would be given to countries with which there are close economic and political ties.
Besides priority would be given to countries that, if appropriate, provide their tax payers with sufficient scope for regularisation and which are considered to be important and promising in terms of their market potential for Switzerland's finance industry.
According to Switzerland, negotiations on the automatic exchange of information with other selected countries are to be examined.
"There is to be only one global standard, the exchanged information should be used solely for the agreed purpose (principle of specialty), the information should be reciprocal, ie should flow in both directions, data protection must be ensured and the beneficial owners of trusts and other financial constructs should also be identified," it said.
