On 13 August 2021, the Swiss Federal Tax Administration published a clarification, announcing that the conditions for the activation of the most favoured nation (MFN) clause contained in the amending protocol, signed on 30 August 2010, to the India - Switzerland Income Tax Treaty (1994) have been met.
The MFN clause should apply as of 1 January 2021. If India does not apply the clause on a reciprocal basis, Switzerland will apply the reduced rate from 1 January 2023.
Currently, the treaty provides for a 10% withholding tax on dividends.
The MFN clause of article 11 of the 2010 protocol provides that this rate will be reduced when India afterwards signs a new treaty with another OECD Member States providing for a lower rate.