Current Affairs - International - Discussion

Switzerland has decided to suspend the Most-Favored-Nation (MFN) clause in its Double Taxation Avoidance Agreement (DTAA) with India, starting from January 1, 2025. This decision will increase tax rates on dividends and royalties to 10%. The suspension was triggered by a ruling from India’s Supreme Court, which stated that the application of the MFN clause requires formal notification under the Income Tax Act. This change is expected to impact tax burdens for both Indian and Swiss companies, potentially affecting their bilateral trade relations.