Berne/New Delhi: Switzerland's tax cooperation with India is being negatively impacted over the "contentious" issue of sharing information based on illegally obtained data, according to the Swiss government.


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However, Switzerland has said both sides have better understanding about each other's positions and significant progress has been made in terms of administrative assistance on tax matters.


"The issue of tax cooperation based on data obtained illegally is a contentious subject which has a negative influence on tax cooperation with India and Switzerland's position in the Global Forum," Switzerland has said in the report titled 'international financial and tax matters 2016'.


The remarks come against the backdrop of India looking to get information about Indians whose name figured in a list of bank account holders in Geneva branch of HSBC that was leaked by a former employee turned whistleblower Herve Falciani.


Falciani is facing charges in Switzerland of leaking details of bank account holders in Geneva branch of HSBC -- a list which later reached French government and subsequently was shared with India as it had accounts of those Indians who had stashed funds abroad.


India and Switzerland have been working closely on mutual administrative assistance on tax matters and both sides have expressed their willingness to step up the cooperation.


The report, released last week, said regular dialogue has taken place at the political as well as specialist levels between the two sides since 2014 apart from regular exchanges between the tax authorities.


"These contacts have contributed to a better understanding of the respective positions and to significant progress in terms of administrative assistance.


"Nevertheless, India remains firm on the question of tax cooperation on the basis of HSBC data which it considers to have received legitimately based on the applicable administrative assistance mechanisms," the report noted.


Last year, Head of the Federal Department of Finance Ueli Maurer had several meetings Finance Minister Arun Jaitley on the fringes of international meets, it added.


In January, Jaitley and his Swiss counterpart Maurer had met on the sidelines of the World Economic Forum (WEF) annual meeting at Davos.


Separately, Jaitley and Maurer had told PTI that both the countries are willing to step up their cooperation on tax matters.


According to the report, it has intensively pursued tax cooperation with important partners such as Italy, France, the US and India.


Prepared by the Swiss Federal Department of Finance, the report provides information on activities in the areas of financial market regulation, engagement in international financial bodies and international tax policy in 2015.