Mauritius Seeking Extension Of DTA With Indonesia

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

30 November 2004

Speaking on Friday, Mauritius' Deputy Prime Minister and Finance Minister, Pravind Jugnauth revealed that the government is planning to push for an extension of the avoidance of double taxation (DTA) agreement with Indonesia, which is set to expire at the end of this year.

In a circular issued this summer, the Indonesian Directorate General of Taxation revealed that it had terminated the DTA with Mauritius over concerns that under the terms of the agreement, 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.

However, Mr Jugnauth told those attending the launch of the Mauritian branch of the International Fiscal Association (IFA), that he had written to his Indonesian counterpart asking for negotiations on the renewal of the double tax pact to be opened.

After India, Indonesia represents the Mauritian financial services sector's second largest market, with investments to the tune of $3 billion likely to be adversely affected if bilateral DTA negotiations are unsuccessful.

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