Switzerland revokes ‘Most Favoured Nation’ status given to India
Indian establishments operating in Switzerland will be affected
Bern (Switzerland) – The Swiss Government has withdrawn the ‘Most Favoured Nation’ status granted to India. After this decision of the Swiss Government, Indian establishments operating there will have to pay 10 percent more tax from 1stJanuary, 2025. Switzerland had granted ‘Most Favoured Nation’ status to India under the Double Tax Avoidance Agreement (DTAA). This decision taken by Switzerland will affect establishments operating there in the commerce, pharmaceutical and technology sectors.
1.Switzerland recently said that this step was taken due to a decision by the Indian Supreme Court. Last year, in a case related to Nestle, the Supreme Court of India had ruled that DTAA cannot be implemented without notification under the Income Tax Act. Nestle is a Swiss establishment.
2.Two countries enter into a Double Taxation Avoidance Agreement (DTAA) to protect their citizens and establishments from double taxation. Under this, establishments or citizens do not have to pay taxes in 2 different countries for their services or products.
3.India’s Ministry of External Affairs spokesperson Randhir Jaiswal said that negotiations will be resumed with Switzerland on this matter.