NEW DELHI, Nov 24: Swiss banks expect a significant decline in quantum of foreign money managed by them going forward, as Switzerland has agreed to an automatic exchange of tax information with foreign jurisdictions, including India.
All Swiss banks put together managed assets totalling 5.57 trillion Swiss francs (over Rs 383 lakh crore) at the end of 2012, out of which 51 per cent came from abroad, after an increase of over six per cent during the year.
“We anticipate that implementation of the automatic exchange of information within the OECD will in the short term lead to a reduction in the volume of assets managed in Switzerland,” according to Swiss Bankers Association (SBA).
The grouping expects the fall in volume of assets since previously untaxed assets would have to be regularised before the move to automatic exchange of information can take place.
However, the banks expect the situation to stabilise over the longer term with a corresponding increase in assets managed in Switzerland.
Shedding its banking secrecy ways, Switzerland last month agreed to automatic exchange of information and mutual administrative assistance in tax matters with overseas authorities under the OECD convention.
The Organisation for Economic Cooperation and Development (OECD) sets the global tax framework and leads the efforts to ensure better transparency in taxation issues worldwide.
Nearly 60 countries, including India, are signatories to OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters that provides for
The convention, which has now been signed by 58 jurisdictions, including India, provides for information sharing and mutual cooperation among the members.
Meanwhile, banks in Switzerland managed 5.565 trillion worth assets last year. Out of the total amount, 51 per cent came from abroad while the rest from within the country.
As per the association, assets attributable to “Swiss asset management totalled some 2,500 billion Swiss francs at the end of 2012.”
Out of that, around 1,500 billion Swiss francs were related to assets of institutional clients and more than 450 billion Swiss francs of investment funds managed in the country.
“… A further 280 billion Swiss francs was invested in investment funds managed in other countries but distributed in Switzerland,” the grouping said in its latest report on wealth management trends.
Underscoring the importance of cross border business, the association’s CEO Claude-Alain Margelisch has said that international regulations naturally have a major impact Swiss wealth management.
Swiss Bankers Association represents 333 institutional members and about 18,700 individual members, according to its website. (PTI)
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