Switzerland signs Protocol to tax treaty with India
The Swiss government signed, on 30 August 2010, a Protocol to revise the existing income tax treaty with India in line with the OECD standard on exchange of information. The protocol also improves the agreement and promotes the further development of bilateral economic relations.
The revised treaty, signed in New Delhi by visiting Swiss Foreign Minister Micheline Calmy-Rey and Indian Finance Minister Pranab Mukherjee, will make it possible for Switzerland to come to an agreement with India on an automatic and extensive "most favoured nation" clause. In the case of dividends, interest, royalties and payments for technical services, this clause makes provision for the lowest withholding tax rate that India has with another OECD nation to apply automatically to Switzerland.
The revised treaty will also ensure that in the future, shipping companies operating internationally would have to pay tax on their profits only in their country of domicile.
India currently has treaties with as many as 79 countries, but none of them yet has provisions for exchange of information related to taxation.
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