In a significant development, Switzerland has taken a unilateral decision to revoke the 'Most Favoured Nation' status accorded to India under the Double Taxation Avoidance Agreement (DTAA) treaty. This move will have a major impact on Indian businesses operating in Switzerland as well as Swiss investments in India. The decision was made by the Swiss finance department in response to the Supreme Court of India's 2023 ruling, stating that the MFN clause between two nations does not automatically apply when a country joins the OECD. This raises questions on the interpretation and application of the MFN clause in tax treaties under the OECD, which is known for shaping international policies for better economic and social outcomes.
India-Switzerland Most Favoured Nation Status: A Deeper Dive
Background
India and Switzerland have enjoyed a long-standing Double Taxation Avoidance Agreement (DTAA) since 1995. Under the treaty, both countries agree to avoid double taxation on certain types of income earned by individuals and companies residing in their respective territories.
A key provision of the DTAA is the "Most Favoured Nation" (MFN) clause. This clause mandates that if either country grants a more favorable tax rate to any third country, it must automatically extend the same rate to the other DTAA partner.
MFN Revocation by Switzerland
In a significant development, Switzerland has unilaterally revoked the MFN status accorded to India under the DTAA treaty. This decision stems from the Supreme Court of India's 2023 ruling, which held that the MFN clause does not automatically apply when a country joins the Organisation for Economic Co-operation and Development (OECD).
Switzerland's decision has sparked concern among Indian businesses operating in Switzerland and Swiss investors in India. It raises uncertainty regarding the tax rates and liability that will apply to their income and investments.
Top 5 FAQs
1. What does MFN status mean?
MFN status ensures that countries treat each other's citizens and businesses as favorably as they treat their own, in terms of taxation.
2. Why has Switzerland revoked India's MFN status?
Switzerland has revoked India's MFN status due to the Supreme Court of India's ruling that the MFN clause does not automatically apply when a country joins the OECD.
3. What are the implications for Indian businesses in Switzerland?
Indian businesses in Switzerland may face higher tax rates or additional tax liability as a result of the MFN revocation.
4. What are the implications for Swiss investments in India?
Swiss investors in India may also experience higher tax rates or additional tax liability due to the MFN revocation.
5. What is the future of the India-Switzerland DTAA?
The future of the DTAA is uncertain. India has expressed its concern over Switzerland's decision and is seeking clarification on the matter. It is possible that the two countries will engage in negotiations to revise the DTAA.
On the occasion of Vijay Diwas, India and Bangladesh commemorated the victory of the Indian Armed Forces in the Indo-Pakistan war of 1971. Officers from the Indian Army, Navy, and Air Force paid their respects at the Army Headquarters Eastern Command in Kolkata, along with their counterparts from the Bangladesh Army. To celebrate this joint victory, eight Indian war veterans and two serving officers have arrived in Dhaka while eight Bangladeshi freedom fighters and two serving officers are in Kolkata to participate in the annual exchange of war veterans and attend the Vijay Diwas celebrations.
Vijay Diwas is an annual celebration commemorating India's victory over Pakistan in the 1971 war, which led to the liberation of Bangladesh. The war began on December 3 and ended on December 16, with the surrender of Pakistani General Amir Abdullah Khan Niazi to the combined forces of India and Bangladesh's Mukti Bahini. This victory not only established India as a regional power but also resulted in the birth of Bangladesh. As the country celebrates this historic day, the sacrifices and bravery of the Indian armed forces are honored.
In a statement that was the first of its kind from a U.S. official, Secretary of State Antony Blinken confirmed on Saturday that the Biden administration has been in direct contact with Hayat Tahrir al-Sham (HTS), a rebel group that previously led the overthrow of Syrian President Bashar Assad. While Blinken did not disclose the details of the contacts, he stressed the importance of conveying messages to the group about its conduct and intentions during Syria's transition to a peaceful and inclusive country. This confirmation comes as part of a larger effort by the U.S., 8 Arab nations, Turkey, and officials from the EU and UN to sign off on principles for Syria's transition.
Title: Indian Nationals Face Tragic Deaths in Canada, Government Urges Caution The Ministry of External Affairs expressed deep sorrow over the recent deaths of Indian nationals in Canada and urged the Indian High Commission and consulates to provide assistance to the affected families. Amid the growing incidence of hate crimes and criminal violence, the Ministry also issued a warning to Indian students studying in Canada to remain cautious and vigilant. The deaths of Gurasis Singh, Rittika Rajput, and Harshandeep Singh have raised concerns about the safety of Indians in Canada and have sparked investigations by the local authorities.
On November 15, 2024, the holy date of Kartik Purnima will be celebrated. This date is considered to be extremely auspicious, and is associated with rituals such as bathing in holy waters, making donations, and lighting lamps. The energy of the date and its association with deities make it a highly revered day for individuals looking to gain divine blessings. This article provides insight and significant details about Kartik Purnima 2024, including its date, auspicious timings, rituals, and significance.
Heavy rainfall has been causing chaos in various districts in Tamil Nadu, including Nellai, Thenkasi, and Thoothukudi, due to strong winds on the Bay of Bengal. The Meteorological Department has issued a weather alert in 14 districts, including Neelagiri, Coimbatore, Trichy, and Thanjavur, among others. Measures to ensure the safety of citizens, such as online safety tips, have been suggested by the authorities.
As heavy rains continue to pound Tamil Nadu, several districts are facing severe flood situations. The Chembarambakkam Lake and Poondi Sathymoorthy Sagar Reservoir are rapidly filling up, raising concerns for residents living along the banks of these water bodies. Over 23 districts have declared a holiday for schools and the National Disaster Response Force has been called in case of emergency. Here are five updates on the current situation in the state.
A leopard attack in Mandavgan Pharata village in Pune district claimed the life of a four-year-old boy, marking the ninth fatality in human-leopard conflict in the Junnar forest division since March. The boy, who was visiting his native village with his family, was attacked while playing near his house. Forest officials have installed trap cages and are using drone cameras to trace the leopard's movements, and have advised caution for residents in the area where leopards are known to be present. This incident follows the death of a seven-year-old boy in the same area last month, highlighting the danger of living in areas with a high concentration of leopards.
The Supreme Court has announced that emergency measures under Stage 4 of the GRAP for air pollution in Delhi will continue until Monday, with exception to modifications related to schools. An explosion was reported near a PVR theatre in Prashant Vihar, followed by an attack on an ED team investigating a money laundering case. The national capital recorded an AQI of 310, placing it in the 'very poor' category, with Mundka reaching an alarming level of 373. The situation is now under control, but concerns for air quality and safety remain high in Delhi.