India-Swiss DTAA (Avoid Double Taxation for Indians)

With DTAA, Switzerland refunds the excess 25% so the effective Swiss tax is 10%, and India gives you a Foreign Tax Credit for that 10% via Form 67. The net result is one effective layer of tax (your Indian rate), not two.

Note: Paasa helps investors apply these treaty benefits correctly through Swiss refund documentation and guided Form 67 filing, ensuring every dollar earned abroad is taxed only once.

What is the India & Switzerland DTAA Treaty?

The India–Switzerland Double Taxation Avoidance Agreement (DTAA) makes sure the same income isn’t taxed twice, once where it’s earned (the source country) and again where the investor lives (the residence country).

For Indian residents earning dividends from Swiss stocks or equity ETFs via Paasa, this treaty is what keeps your total tax fair and compliant. (Switzerland deducts tax first; the treaty + India’s credit rules ensure you don’t pay twice.)

While the DTAA covers many income types, this guide focuses only on equities, specifically:

• Dividends from Swiss shares and equity ETFs
• Capital gains on listed shares/ETFs

In simple terms, the DTAA works through two mechanisms:

1. Allocating taxing rights: It defines which country has the primary right to tax each category of income (e.g., dividends vs. capital gains).
2. Granting relief: If both countries tax the same income, your country of residence (India) allows a tax credit for tax already paid abroad. 

With Switzerland, there’s typically a refund step first (Swiss tax withheld → refund down to the treaty rate), and then India gives credit for the tax that ultimately remains.

You can read the official India–Switzerland DTAA text on the Government of India’s website here.

For a practical investing workflow for this market, read Invest in Switzerland from India.

Residency rules under DTAA

The treaty’s first step is to decide where you are a tax resident. If you are considered a resident in both India and Switzerland during a financial year, the DTAA uses a tie-breaker to pick one country for treaty purposes.

For example, if you live in India but spend significant time in Switzerland, the tie-breaker decides which country will treat you as its resident for tax purposes.
It follows a clear sequence:

• Permanent home: Where you have a fixed home available.
• Centre of vital interests: Where your personal and economic relations are stronger.
• Habitual abode: Where you stay more frequently.
• Nationality: If still unresolved, the country of citizenship applies.
• Mutual agreement: In rare cases, both tax authorities mutually decide.

Understanding residency is crucial because DTAA benefits apply only to residents of one of the treaty countries. For most Indian investors earning Swiss equity income such as dividends or capital gains, India is the country of residence and Switzerland is the source country.

Source vs Residence (Who gets to tax what)

The treaty divides taxing rights between the country of source (where the income arises) and the country of residence (where you live and file taxes).

Here’s how it works for income types relevant to Swiss equities:

How DTAA Applies to Dividends, Interest & Capital Gains

When Indian investors earn income from Swiss assets such as stocks or equity ETFs, Switzerland deducts tax at source before paying out. This is called withholding tax, and by default it is 35% on dividends and on eligible Swiss-source interest.

However, under the India–Switzerland Double Taxation Avoidance Agreement (DTAA), this burden reduces. You file a refund with the Swiss Federal Tax Administration to bring Swiss tax down to the treaty rate of 10%, and then you claim a foreign tax credit in India for the tax already paid abroad.
Let’s see how it works for the most relevant income types:

Dividends

• By default, Switzerland withholds 35% on dividends paid by Swiss companies.
• Under the DTAA, once you apply for the Swiss refund, the rate comes down to 10% for India-resident beneficial owners.
• The balance Indian tax is paid in India, with a credit for the 10% Swiss tax that finally remains.

Note: For most Paasa investors, the final Swiss rate is 10% after refund. The initial 35% is reclaimed. The same 10% can be claimed as a foreign tax credit when filing Indian taxes via Form 67.

Interest

Interest income from ETF distributions classified as interest (not bank deposits) faces a 35% Swiss withholding at source by default.

Under the DTAA, for individual investors the treaty rate is 10%. Relief is by refund. You reclaim the excess Swiss tax so the final rate is 10%.

Example: You receive CHF 30,000 in Swiss-source interest this year.

• Switzerland withholds CHF 10,500 (35%).
• In India, at a 30% slab, tax on this interest is CHF 9,000.
• You claim foreign tax credit of CHF 3,000 for the Swiss tax that finally remains after refund.
• You pay the balance CHF 6,000 in India.
• Total tax = CHF 9,000 (your Indian rate), not 65%.

Note: For most Paasa investors who are individuals, expect 35% at payment, a refund down to 10%, and a matching foreign tax credit in India via Form 67.

Capital Gains

Under the India–Switzerland DTAA and Swiss domestic rules, capital gains from the sale of listed Swiss securities by an India-resident individual are taxed only in India, not in Switzerland.

• Switzerland does not levy capital gains tax on private investors selling listed shares.
• Indian residents must report and pay capital gains tax in India as part of global income.
• The applicable Indian rate depends on the holding period: Long-term capital gains on foreign shares (held for more than 24 months): 12.5% without indexation. Short-term capital gains (held for 24 months or less): taxed at the investor’s income-tax slab rate.

How to avoid double taxation?

Once both countries have exercised their taxing rights, the DTAA gives you relief through India’s Foreign Tax Credit (FTC) system under Sections 90 and 91, read with Rule 128.

Here’s how it works:

• If Switzerland finally keeps 10% on your dividend (after refund) and your Indian slab rate is 30%, India allows a credit for the 10% already paid abroad.
• You pay only the remaining 20% in India so that your total equals your Indian rate, not both countries added together.

Note: Paasa helps streamline this flow with clear income summaries, Swiss refund documentation support, and ready-to-file Form 67 figures so every rupee earned abroad is taxed only once. 

Example 1: Interest income

Imagine an Indian investor holding units of a Swiss bond ETF such as UBS ETF (CH) SBI Domestic Government (A-dis). The fund pays interest-type distributions periodically.

• When those distributions are paid while the person is living in India, Switzerland withholds 35% at source.
• Under the India–Switzerland DTAA, the final rate for individuals is 10%. You file a refund to reduce 35% down to 10%.
• Since the person is an Indian tax resident, India also taxes that same income as part of global earnings.
• Under the DTAA, the individual can claim a Foreign Tax Credit (FTC) in India for the 10% Swiss tax that finally remains.
• Effectively, they pay only the difference in India if India’s rate is higher, not the full amount twice.

Example: Suppose an Indian investor receives CHF 25,000 of distribution income from the Swiss bond ETF this year while living in India.

Paasa’s role:

• Paasa guides investors through the Swiss refund paperwork to reach the 10% treaty rate and prepares ready figures for Form 67 so the FTC is claimed correctly in India.
• We keep distribution breakdowns and Swiss tax vouchers organized, reducing source-tax drag and protecting long-term returns.

Example 2: Dividend Income from Swiss Stocks and ETFs

An Indian investor using Paasa may hold individual Swiss stocks like Nestlé S.A. (SIX: NESN) or Novartis AG (SIX: NOVN), or equity ETFs with Swiss exposure.

• Swiss companies pay regular dividends, and Switzerland withholds 35% at payment by default.
• Under the India–Switzerland DTAA, you apply for a Swiss refund to reduce this to 10% if you are an India-resident beneficial owner.
• In India, you must still declare the gross dividend and claim a Foreign Tax Credit (FTC) for the 10% finally kept by Switzerland.

How DTAA helps

• The 10% Swiss tax that remains after the refund can be claimed as FTC in India through Form 67.
• If your Indian slab rate is 30%, you pay only the remaining 20% in India, so your total stays 30%, not 35% + 30%.
• Compliance stays straightforward with Paasa’s refund guidance and ready FTC figures.

Example: Let’s say an Indian investor using Paasa holds Nestlé S.A. (SIX: NESN) and receives $20,000 in annual dividends.

Paasa’s role:

Paasa guides investors through the Swiss refund process and the Form 67 credit step so that global income is reported correctly and DTAA benefits apply automatically.

Swiss Inheritance and Wealth Taxes (What the DTAA does not cover)

Many Indian investors holding Swiss equities are unaware that inheritance and wealth taxes are outside the India–Switzerland DTAA. The treaty covers taxes on income only.

• Inheritance tax in Switzerland typically applies when the decedent was Swiss-resident. If an India-resident investor passes away while not Swiss-resident, Swiss inheritance tax generally does not apply to movable assets such as listed shares.
• Wealth tax is an annual tax on Swiss residents. Non-residents are not charged Swiss wealth tax on portfolio shares unless the assets are attributable to a Swiss permanent establishment.
• India has no estate or wealth tax. Heirs in India do not pay tax on inheriting shares. Tax arises only on a later sale under Indian capital-gains rules.

Paasa’s role:

Paasa helps investors stay organized for succession and tax filing by providing clear dividend and transaction statements, guidance for Swiss refund paperwork on dividends, and ready Form 67 figures for India. This keeps your global equity income compliant and makes it simpler for heirs to step in if needed.

Common Mistakes Investors Make

Even seasoned investors slip up when managing Swiss equity income across two tax systems. These aren’t about intent, just clarity. Here are the most common ones to avoid:

Assuming Swiss withholding is automatically adjusted in India
The 35% Swiss tax deducted on dividends does not sync with Indian filings. You must claim relief through the Swiss refund first and then Form 67 for the credit in India.

Skipping Form 67 submission
Missing Form 67 can forfeit your Foreign Tax Credit, even if Swiss tax was paid and refunded down to 10%.

Not reporting foreign assets in Schedule FA
Every overseas brokerage account and security must be disclosed in your Indian return. Non-disclosure can trigger scrutiny later.

Confusing inheritance/wealth taxes with double taxation
The India–Switzerland DTAA covers income taxes only. Swiss inheritance and wealth taxes are separate and generally matter only if you become Swiss-resident. Don’t mix these with dividend withholding or FTC.

Forgetting the treaty mechanics on dividends and interest
Switzerland withholds 35% at payment. Under the DTAA, you refund to 10% and then claim FTC in India for that 10%. Filing correctly preserves your post-tax return.

Claiming credit for the wrong amount
You cannot claim FTC for the full 35% deducted at payout or for any withholding suffered inside foreign ETFs. Credit only the 10% that finally remains after your Swiss refund, capped by Indian tax on that income.

Relying on W-8BEN for Switzerland
W-8BEN is a U.S. form. It does nothing for Swiss withholding. Use Swiss FTA refund forms plus TRC, 10F details if asked.

Conclusion

The India–Switzerland DTAA ensures that Indian residents earning from Swiss equities pay tax only once on their global income. Using the Swiss refund to reach the 10% treaty rate and claiming credit in India helps you stay compliant and protect post-tax returns.

About Paasa

Paasa is an Indian investor’s gateway to compliant global investing, trusted by HNIs, family offices, and professionals with overseas income. It helps you diversify into markets across the U.S., Europe, Japan, and more. 

What sets Paasa apart is its India-first compliance layer for cross-border investors:

• FEMA, LRS, and DTAA alignment built into every transaction and cash flow.
• Integrated tax analytics and reporting for Indian residents investing abroad, covering LTCG, STCG, dividend tax, and TCS tracking.
• End-to-end support for remittances, reconciliation, and tax-credit documentation such as Form 67.

Whether you invest in U.S. equities, UCITS ETFs, or curated global equity strategies, Paasa offers one transparent platform to keep your portfolio aligned with India’s tax and regulatory framework.

Relevant Reads

Compare routes, costs, and taxes across markets with these quick reads.

• Invest in US from India
• Invest in Ireland from India
• Invest in Switzerland from India
• Invest in China from India
• Invest in Japan from India
• Invest in Singapore from India
• Invest in UK from India
• Invest in Poland from India
• Invest in Germany from India

Disclaimer

This article is intended solely for information and does not constitute investment, tax, or legal advice. The material is based on public sources and our interpretation of prevailing regulations, which are subject to change. Investing in global markets entails risks—this is including currency risk, political risk, and market volatility. Past performance does not predict future outcomes. Please seek advice from qualified financial, tax, and legal professionals before acting.