Mauritius to fully cooperate with India to address outstanding issues relating to DTAA
The India-Mauritius Double Taxation Avoidance Agreement (DTAA) may see some headway with the island nation promising full cooperation with India to address outstanding issues relating to their bilateral tax treaty.
The development comes days after Prime Minister Narendra Modi visited Mauritius. Its Finance Minister Seetanah Lutchmeenaraidoo in his Budget speech said that “The clear statement made by Prime Minister Modi during his last visit in Mauritius has reassured all stakeholders in the global business sector that India will do nothing to harm this sector.” He further said that we will cooperate fully with Indian authorities to bring to a fruitful conclusion our discussions on outstanding issues relating to the Double Taxation Avoidance Agreement.
It has long been debated that Mauritius is being used for round-tripping of funds into India even though it has always maintained that there have been no concrete evidence of any such misuse. Recently, during his visit, PM Modi and his Mauritian counterpart Anerood Jugnauth discussed the issues related to the tax treaty.
Under the DTAA, capital gains on sale of assets in India by companies registered in Mauritius can only be taxed in Mauritius. While short-term capital gains are taxed at 10 per cent in India, they are exempt in Mauritius. So, such companies escape paying taxes in both countries.
