Switzerland’s suspension of the MFN clause in its tax treaty with India will double dividend tax rates for Indian investors. Mint examines the Nestle case, the Supreme Court’s ruling, and its wider impact on trade relations.

Switzerland has suspended the "Most Favoured Nation" (MFN) clause in its Double Taxation Avoidance Agreement (DTAA) with India. This move could impact Swiss investments in India and increase taxes for Indian companies operating in Switzerland.

Switzerland will suspend the MFN clause in its DTAA with India starting January 1, 2025, increasing dividend taxes for Indian businesses operating in the country.

The suspension of the MFN (most favoured nation) clause by Switzerland underscores the need for India to adopt a more consistent and strategic approach to international taxation treaties, think tank GTRI said on Friday.

Switzerland will suspend a key tax provision with India from 2025, impacting dividend income for Indian companies operating there. This follows an Indian Supreme Court ruling on the most favoured nation clause,

This decision comes after an adverse ruling from the Indian Supreme Court regarding a tax dispute involving Nestlé, the Swiss food giant headquartered in Vevey.

Switzerland suspends MFN status for India, leading to higher tax liabilities for Indian entities in Switzerland from 2025.

In a statement, Switzerland announced suspension of the application of the most favoured nation (MFN) clause of the protocol to the agreement between the Swiss Confederation and the Republic of India