The Financial Express. By. Sameer Gupta Tax Leader, Financial Services, EY India. The India-Mauritius treaty (IM treaty) has had a chequered destiny and has . The Double Tax Avoidance Agreement (herein referred as “DTAA”) entered into between India and Mauritius provides for potential tax exemption to the foreign. Jun 7, Negotiations to amend the Mauritius-India DTAA finally came to an end last May, when officials of both governments signed what is now termed.

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Therefore, the benefits accorded under the Singapore Tax Treaty would fall away, unless amended. As India opened the doors of its economy to foreign investment inMauritius became a favourite jurisdiction for channelling investments into India.

All Treaties are prone to readjustments from time to time, and the Mauritius-Indian treaty was due a facelift. The imposition of capital gains tax on the acquisition of shares of Indian companies after March 31, could, however, result in a slowing of the flow of investments. What will be the impact on investments routed through Singapore? Through this blog EY will provide viewpoints, commentary on trends and the delivery of fresh perspectives to evolving issues relevant to executive decision makers.

EY refers to the global organization and may also denote one mauriius more of the member firms of EY Global Limited, each of which is a separate legal entity. Income-tax Double Taxation Relief Aden Rules, – Present position thereunder These Rules being consistent with the corresponding provisions of the Act, continued to be. The Finance Ministry statement said the protocol would tackle issues of treaty abuse and round-tripping of funds attributed to the India-Mauritius treaty, curb revenue loss, prevent double non-taxation, streamline the flow of investment, and stimulate the flow of exchange of information between India and Mauritius.

Article 13 4 of the DTAA provides that the profits made by a resident of a contracting state from the alienation of shares shall be taxable only mxuritius that state. The tax payer is entitled in law to seek the benefit under the DTAA if the provision therein is more advantageous than the corresponding provision in the domestic law. After a series of high-profile court hearings, the status quo appeared to have been maurituis.

What the changes in the tax treaty with Mauritius mean for India, investors

Home Explained What the changes in the tax treaty with Mauritius mean for India, investors. Making women feel complete again.


Mauritius has benefitted from rather generous terms in this DTA with India for decades.

Publications Vistra Corporate Brochure. In terms of paragraph 4, capital gains derived by a resident of Mauritius by alienation of shares of companies shall be taxable only in Mauritius according to Mauritius tax law. Online Copyright Registration in India Call us at: Please turn on JavaScript and try again. The fact that the capital asset is located in India is immaterial.

India made sure that it signed the amendments with Mauritius first; to make sure that others follow suit or are left drifted as GAAR which came into force 1 April Conclusion All Treaties are prone to readjustments from time to time, and the Mauritius-Indian treaty was due a facelift. The Government also deserves to be applauded for giving sufficient notice of close to a year before the change takes effect as well as providing protection to existing investments.

India wants its taxing rights back. Agreement for Avoidance of Double Taxation and prevention of fiscal evasion with Armenia Whereas the annexed Convention between the Government of the Republic of India and the. We have now seen the inevitable realignment of the terms of the Treaty.

We approve of the reasoning in the decisions which we have noticed. Politically, this would be viewed as an achievement for the Government. The best in all-American drinks. Mauritius entities currently enjoy a zero tax policy on capital gains on investments in the Indian market and changed as of 1 April The Indian Revenue have in the past questioned the eligibility of capital gains tax exemption under the Tax Treaty on the ground that the Mauritian Company has no real commercial substance and it has been merely set-up for Treaty Shopping.

Xtaa for indk of double taxation of income of enterprises operating aircraft with Afghanistan Whereas the Government of India and the Government of Afghanistan have.

India-Mauritius DTAA amendments – a Bird’s eye view | Taxsutra

During a visit to Mauritius, Prime Minister Modi raised the question of treaty re-negotiation. Why managers should reveal their failures. The protocol gives India the right to tax capital gains on transfer of Indian shares acquired on or after 1 April Maurritius realignment has certainly allowed India to retain more by way of taxes but the Mauritius route is far from being obsolete. However, the protocol will impact all prospective investments with effect from April 1, However India has been keen to show its preference by lowering Indian withholding tax on interest to just 7.


This seems to favour shareholders returns, as opposed to other countries which might still exempt entities of capital gains as stipulated in their DTAA with India but are taxed at a much higher rate domestically.

The treaty provides for mauritijs capital gains tax exemption to a Mauritius resident on transfer of Indian securities.

The New Mauritius-India DTA – Still the Best Route to India | Vistra

It is also expected to discourage speculators and non-serious investors, and thereby reduce volatility in the market. This well maurittius principle has been re-stated by the Supreme Court in the case of Union of India vs. One will need to be cautious of the impact of this development on foreign flows, at least in the near term. Read next Thursday, 20 December.

While Mauritius has traditionally accounted for almost a third of mauriyius total FDI inflow into India, Singapore has emerged as a preferred destination over the last few years. The Income Tax Department appeals to taxpayers Ctaa to respond to such e-mails and NOT to share information relating to their credit card, bank and other financial accounts. It develops leaders who team up to deliver on their promises maruitius all its stakeholders. However, the position of taxability of capital gains is otherwise under the provisions of DTAA between India and Mauritius.

The India-Netherlands treaty is a smart treaty, and it can emerge as a preferred alternative for FIIs especially those in Europe. While the golden tap dtaw flowing, apprehensions on round tripping of money by Indians via Mauritius continued even as successive Governments made efforts to renegotiate the treaty.

A much needed and timely impetus. The applicant in this case sold its entire stake in Quippo Telecom Infrastructure to another Mauritius based Company.

Therefore, any resident of Mauritius deriving income from alienation of shares of Indian companies will be liable to capital gains tax only in Mauritius as per Mauritius tax law and will not have any capital gains tax liability in India. We will have to talk to the Singapore government and get it revised. The new regulations may not be ideal but Mauritius remains a very competitive jurisdiction for Indian investments for the following reasons: