Switzerland Removes India from 'Most Favored Nation' Status

Switzerland has revoked India's "Most Favored Nation" (MFN) status, increasing the withholding tax rate for Indian companies from 5% to 10%. This move follows a September 2023 ruling by India's Supreme Court in the Nestlé case, which clarified that provisions of the double taxation avoidance agreement cannot be enforced without a specific notification under Section 90(1) of India's Income Tax Act. During a Friday briefing, Indian Ministry of External Affairs spokesperson Randhir Jaiswal commented, "I believe the matter will be reconsidered under the EFTA framework concerning the double taxation avoidance agreement." Switzerland's Finance Department has announced that the suspension of MFN benefits will take effect on January 1, affecting trade relations between the two countries.