CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. India, Mauritius Look Forward To Ending DTA Controversy

India, Mauritius Look Forward To Ending DTA Controversy

by Mary Swire, Tax-News.com, Hong Kong

14 March 2013


India and Mauritius hope to draw the protracted negotiations over their double tax agreement (DTA) to a close next month.

The existing treaty was signed in 1983, but the Indian Government has been pushing for a number of years for changes to its terms. In particular, concern has been expressed regarding clauses that permit both resident Indian and foreign investors to route investment into India via Mauritius, and take tax-free gains.

The latest development in the saga came this week, when Indian President Pranab Mukherjee met with the Mauritian Prime Minister Navin Ramgoolam. Commenting on their meeting, both expressed their hope that an agreement could be reached.

Mukherjee praised the efforts of the Joint Working Group set up to hammer out a deal, stressing that the forum has "provided an opportunity for both sides to discuss all issues with the aim of finding a mutually acceptable and beneficial outcome." Ramgoolam added that "some common ground" had been found.

It has in the past been alleged that the treaty allows for a high incidence of "round-tripping," whereby funds are transferred out of India and then transferred back as foreign investment into the Mumbai stock market via participatory notes.

The current treaty only provides for the taxation of capital gains tax (CGT) in an investor's country of residence. The Indian Government is said to be seeking the imposition of CGT on any investments re-routed from Mauritius, in an effort to curb tax avoidance. However, Mauritius has made it clear that it is not prepared to renounce the existing exemptions.

India will hold the next Joint Working Group meeting in New Delhi in April.

TAGS: capital gains tax (CGT) | tax | investment | India | Mauritius | tax avoidance | agreements

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »