Switzerland Withdraws India's Most Favoured Nation Status Following Supreme Court Ruling

The decision, tied to a Nestle-related tax case, will increase dividend tax rates for Indian entities in Switzerland starting January 2025.

Switzerland has revoked India's Most Favoured Nation (MFN) status under their Double Taxation Avoidance Agreement (DTAA), citing a 2023 Indian Supreme Court ruling.
The Indian Supreme Court ruled that the MFN clause does not automatically apply when a country joins the OECD unless explicitly notified under Indian tax law.
The decision will raise the Swiss withholding tax on dividends for Indian entities from 5% to 10%, effective January 1, 2025.
Experts suggest the move could increase tax liabilities for Indian companies operating in Switzerland and impact Swiss investments in India.
India's Ministry of External Affairs has indicated that the DTAA with Switzerland may require renegotiation in light of the recent developments.