BERN: Switzerland has suspended the Most Favoured Nation (MFN) status under the Double Taxation Avoidance Agreement (DTAA) with India, a move that could result in higher taxes for Indian companies operating in Switzerland and potentially affect Swiss investments in India.

The Swiss authorities, in an official statement dated December 11, declared that the MFN clause under the DTAA will cease to be effective from January 1, 2025. This action follows the Indian Supreme Court's interpretation that the MFN clause does not automatically trigger without specific notification under the Income Tax Act.

Explained: What is the most favoured nation clause and why did Switzerland suspended it for India after the Nestle's 2023 Supreme Court ruling

Switzerland suspends MFN treatment for India under DTAA, but it won't impact EFTA trade deal or Swiss investments.

Switzerland cited a 2023 ruling by Indian Supreme Court in a case relating to Vevey-headquartered Nestle for its decision to withdraw the MFN status

The Swiss government has suspended the most favoured nation status (MFN) clause in the Double Taxation Avoidance Agreement (DTAA) between India and Switzerland, potentially impacting Swiss investments in India and leading to higher taxes on Indian companies operating in the European nation.

Swiss authorities withdrew the MFN status that allowed a unilateral reduction of withholding tax, citing absence of reciprocity from India after the 2023 ruling against Nestle

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