In a significant economic development, Switzerland has announced the withdrawal of the Most Favoured Nation (MFN) status it had granted to India. This follows a legal ruling by the Indian Supreme Court against Switzerland-based multinational Nestle, triggering adverse tax implications for Indian businesses.
Effective January 1, 2025, Indian companies operating in Switzerland will be subjected to a heightened withholding tax rate on income generated within the European nation. The new rule will impose a 10 percent tax on dividends earned by Indian entities.
Switzerland’s Federal Department of Finance released a statement specifying the suspension of the MFN clause in the bilateral tax agreement with India, following the court ruling. This decision marks a pivotal move in Swiss-Indian economic relations.
(With inputs from agencies.)