Archive · 26 Sep 2025
SC Dismisses Nestle's Petition, Swiss MFN Status Impacted
The Supreme Court decided that Nestle SA's appeal about dividend taxes was rejected.
This decision followed an earlier ruling.
This initial decision led Switzerland to change how it taxes Indian companies.
Switzerland suspended India's Most Favored Nation (MFN) status because it disagreed with the Supreme Court's interpretation of a tax agreement.
Because of this, Indian companies will likely pay more taxes when doing business in Switzerland starting in 2025.
This situation arose due to a difference in opinion about how the tax agreement between the two countries should be understood.
The Supreme Court dismissed Nestle's curative petition regarding dividend taxation.
The initial ruling, on October 19, 2023, involved the enforcement of the Double Taxation Avoidance Agreement (DTAA).
The ruling resulted in Switzerland suspending India's Most Favored Nation (MFN) status.
Swiss authorities cited differing interpretations of the DTAA.
Indian companies will face increased withholding taxes in Switzerland from January 1, 2025.
- Who
- Nestle SA, Supreme Court of India, and Swiss authorities
- What
- Supreme Court dismissed Nestle’s petition regarding dividend taxation, leading to the suspension of India’s MFN status by Switzerland.
- When
- October 19, 2023, initial ruling; Curative petition dismissed later.
- Where
- India and Switzerland
- Why
- Differing interpretations of the DTAA led Switzerland to suspend India's MFN status due to the Supreme Court ruling.
Indian Income Tax Department
Swiss Authorities and MNCs
DTAA Interpretation
Indian Income Tax Department
A notification under Section 90(1) of the Income Tax Act is necessary to enforce DTAA.
Swiss Authorities and MNCs
Switzerland does not share India's interpretation of paragraph 5 of the IN-CH DTA.
- Case Outcome
- Curative petition dismissed by the Supreme Court
- Plaintiff
- Nestle SA
- Related Agreement
- India-Switzerland Double Taxation Avoidance Agreement (DTAA)
- Impact
- Switzerland suspended India's MFN status
- Tax Change
- Indian companies face higher withholding tax in Switzerland from 2025
- Date of Initial Ruling
- October 19, 2023