In a recently issued circular, the Indonesian Directorate General of Taxation revealed that it has terminated the country's double taxation agreement (DTA) with Mauritius, as anticipated.
The bilateral treaty will cease to apply from January 1, 2005, the circular revealed.
Earlier this year, it had emerged that the Indonesian authorities objected to the fact that non-Mauritian investors could, via offshore companies known as Special Purpose Vehicles (SPVs), invest in Indonesian companies and take advantage of the tax benefits afforded by the treaty as if they were resident in Mauritius.
The Mauritian authorities, however, have said that they regard the termination circular more as a request for re-negotiation of the treaty than an outright cancellation.
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