Which country has announced the suspension of the MFN clause in its tax treaty with India?

A)
Finland
B)
Japan
C)
Germany
D)
Switzerland

Correct Answer :   Switzerland


* 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.

Published On : December 14, 2024