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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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Bringing the bazaars home. The realignment has certainly allowed India to retain more by way of taxes but the Mauritius route is far from being obsolete. Azadi Bachao Andolan, cited supra, in the following passage: A bane of contention in the digital ondo ecosystem Post-merger tales: Existing investments will be grandfathered.

Prev Far-reaching implications of the Mauritius protocol. Why a deal can fail to create value Want to build a purposeful organisation?

Unfortunately all good things come to an end…and it did! The information presented on this blog should not be construed as legal, tax, accounting or any other professional advice or service. The prime minister indicated that the DTA was going to be changed but he also committed that the Mauritius interests would not harmed in any way. Recent news of India and Mauritius signing a Protocol to amend their 33 year old tax treaty caused seismic changes in the tax world.

However, the position of taxability of capital gains is otherwise under the provisions of DTAA between India and Mauritius. Experts say the Netherlands may emerge as an alternative. Thank you for your comment, we value your opinion and the time you took to write to us! The investment strategy between the two long-term investment partners must now be revisited because of the introduction of GAAR and due to the amendments in the DTAA, both effective from 1 April Publications Vistra Corporate Brochure.

The benefits are still potent enough to keep Mauritius an attractive route into India but it is shared more equitably. Politically, this would be viewed as an achievement for the Government. All Treaties are prone to readjustments from time to time, and the Mauritius-Indian treaty was due a facelift. It is also expected to discourage speculators and non-serious investors, and thereby reduce volatility in the market.


While it is expected that benefits of the Singapore treaty would also be available until March 31,experts hope the government would provide a level playing field for investments, and avoid arbitrage between jurisdictions.

India-Mauritius tax treaty: An end and a new beginning

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. It develops leaders who team up to deliver on their promises to all its stakeholders. Concluding remarks The signing of the Protocol is certainly a decisive move mauritihs the Government of Dtwa which puts at rest more than a decade long controversy around the Mauritius treaty.

After 31 Marchtax will be charged at full domestic tax rates. India wants its taxing rights back.

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

Maurjtius India-Netherlands treaty is a smart treaty, and it can emerge as a preferred alternative for FIIs especially those in Maauritius. 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.

Home Explained What the changes in the tax treaty with Mauritius mean for India, investors. EY Global Limited, a UK company, which is limited by guarantees, does not provide services to clients. Gains derived by a resident of a Contract State from the alienation of any property other than those mentioned in paragraphs 12 jndo 3 of this article shall be taxable only in that State. What the changes in the tax treaty with Mauritius mean for India, investors https: Add to that factors like the significant experience gained in dealing with India, cultural and language synergies and even the convenient time zone, and we have the ingredients to remain a major player dta the Indian market.


Online Copyright Registration in India Call us dtaq The fact that the capital asset is located in India is immaterial. Video Slideshow Audio Twinterview.

The Double Tax Avoidance Agreement between India and Mauritius

Read next Thursday, 20 December. The times when capital gains were taxed in the resident country of the investee at zero percent are long gone. DTAAs are termed in such a way that the entity is only taxable in its country of residence.

As India opened the doors of its economy to foreign investment inMauritius became a favourite jurisdiction for channelling investments into India.

Mauritius entities currently enjoy a zero tax policy on capital gains on investments in the Indian market and changed as of 1 April Therefore, the benefits accorded under the Singapore Tax Treaty would fall away, unless amended. Soon enough, the Indian tax officers did not appreciate the prospect of perceived letter box companies in Mauritius claiming the tax exemptions and sent tax bills to them, alleging misuse of treaty.

EY refers to the global organization and may also denote one or more of the member firms of EY Global Limited, each of which is a separate legal entity. Though not completely unanticipated, the change is significant for foreign investors to go back to the drawing board and reassess their structures.

The very object of grafting the said two sections with the said clause is to enable the Central Government to issue a notification under section 90 towards implementation of the terms of the DTAs which would automatically override the provisions of the Income- tax Mauditius in the matter of ascertainment of chargeability to income-tax and ascertainment of total income, to the extent of inconsistency with the terms of the DTAC.