New Delhi, Dec. 14 -- Switzerland has suspended the most favoured nation (MFN) clause in a bilateral tax treaty with India following Indian Supreme Court's decision last year adding an extra procedural layer and making the applicability of the provision non-automatic, in a tax dispute involving Nestle SA.

An order from the Swissgovernment showed that cross-border dividend payments would be subject to 10% tax at source from January 1, as perthe bilateral tax treaty between the two nations, rather than a 5% rate that the Swiss competent authority had said would apply in August 2021. However, forthe tax years between 2018 and 2024, the 5% tax would apply, and the increase applies from next year, the Swiss government order said.

This means ta...