The Swiss authorities have suspended the most favoured nation status (MFN) provision in the Double Taxation Avoidance Agreement (DTAA) with India, which could affect Swiss investments in India and raise taxes for Indian firms operating in Switzerland.
A December 11 statement from the Swiss finance department indicates this decision follows an Indian Supreme Court ruling from last year, which determined that the MFN clause does not automatically activate when a country joins the OECD if India had established a tax treaty before their OECD membership.
India established tax agreements with Colombia and Lithuania offering lower tax rates on specific income types compared to OECD nations. Both countries subsequently joined the OECD.
