Switzerland scraps MFN standing to India, dividend revenue to face greater tax

In an announcement, Switzerland introduced suspension of the appliance of probably the most favoured nation (MFN) clause of the protocol to the settlement between the Swiss Confederation and the Republic of India for the avoidance of double taxation with respect to taxes on revenue. File
| Photograph Credit score: Reuters

Switzerland has withdrawn the Most Favored Nation (MFN) standing granted to India following an hostile court docket ruling in opposition to Nestle, a transfer that may lead to hostile tax implications for Indian entities working within the European nation.

With this, from January 1, 2025, Indian corporations will probably be topic to the next withholding tax on revenue generated in Switzerland.

In an announcement, Switzerland introduced suspension of the appliance of probably the most favoured nation (MFN) clause of the protocol to the settlement between the Swiss Confederation and the Republic of India for the avoidance of double taxation with respect to taxes on revenue.

Switzerland cited a ruling by Indian Supreme Court docket in a case regarding Vevey-headquartered Nestle for its determination to withdraw the MFN.

Which means Switzerland will tax dividends that Indian entities will earn in that nation at 10% from January 1, 2025.