Switzerland Suspends MFN Clause with India! 🇨🇭🇮🇳 Switzerland has announced the suspension of the Most Favored Nation (MFN) clause under its Double Taxation Avoidance Agreement (DTAA) with India, effective from January 1, 2025. This decision follows a 2023 Indian Supreme Court ruling on the Nestle case, which stated that the MFN clause in such agreements does not apply automatically and requires explicit notification under Indian tax law. The suspension will impact the tax rates on dividends, potentially increasing the tax burden for Indian entities in Switzerland, raising it from 5% to 10%. This change could affect Swiss investments in India as well, as dividends would now be subject to higher withholding taxes. Swiss authorities have cited a lack of reciprocity in interpretation as the basis for this decision. The move has led to discussions about the possible renegotiation of the DTAA to address these changes in the bilateral tax framework.

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