Finally, after about 33 years of the India-Mauritius tax treaty coming into force, the treaty has now been amended. What is the key feature of the amendment?. New Delhi: India and Mauritius are set to begin a fresh round of negotiations to amend their double tax avoidance agreement (DTAA) to ensure. The Double Tax Avoidance Agreement (herein referred as “DTAA”) entered into between India and Mauritius provides for potential tax exemption to the foreign.
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For the purposes of the Convention, the maurittius ” resident of a Contracting State ” means any person who under the laws of that State, is liable to taxation therein by reason of his domicile, residence, place or management or any other criterion of similar nature.
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.
International Taxation >Double Taxation Avoidance Agreements
The second and mauritiuss paragraphs deal with right of taxation of capital gains on the alienation of movable property linked with business or professional enterprises and ships and aircrafts. 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.
Have agreed as follows:. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary. Any pension paid by the Government of a Contracting State to an individual who is a national of that State, shall be taxable only in that Contracting State. Paragraphs 3A and 3B inserted by Notification No. Copyright Registration ph no: While there have been concerns in the market that imposition of capital gains tax will deter investments through Participatory Notes or P-notes, Adhia on Wednesday said that there would be no change for P-notes as of now.
Subject to the provisions of paragraph 3 of this article, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.
Mauritius route – Wikipedia
According to a Deloitte India analysis, the island nation may introduce changes in four areas of taxation identified by OECD, either by amending its bilateral tax treaties or by changing its domestic law. The competent authorities of the Contracting States shall exchange such information or document as is necessary for carrying out mmauritius provisions of this Convention or for prevention of evasion of taxes which are the subject of this Convention.
Income from immovable property may be taxed in the Contracting State in which such property is situated. However, such royalties may also be taxed in the Contracting State in ibdia they arise, and according to the law of that State, but the tax so charged shall not exceed 15 per cent of the gross amount of the royalties. Section 90 is for taxpayers who have paid the tax to a country with which India has signed DTAA, while Section 91 provides relief to tax payers who have paid tax to a country with which India has not signed a DTAA.
India, Mauritius set to hold fresh talks on DTAA amendments
Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected in the same circumstances.
The term enterprise of a Contracting State’ and ‘ enterprise of the other Contracting State’ mean respectively an industrail, mining, commercial plantation or agricultural enterprise or similar under taking carried on by a resident of a Contracting State and an industrial, mining, commercial, planta tion or agricultural enterprise or similar undertaking carried on by a resident of the other Contracting State; h.
Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 3A shall be taxable only in the Contracting State of which the alienator is a resident. The term “fees for technical services” as used in the Article means payments of any kind, other than those mentioned in Articles 14 and 15 of this Convention as consideration for managerial or technical or consultancy services, including the provision of services of technical or other personnel.
In no case shall the provisions of this Article be construed so as to impose on a Contracting State the obligation:. It is also expected to discourage speculators and non-serious investors, and thereby reduce volatility in the market. This assistance is not restricted by Article 1 and 2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with the Convention.
Where by reason of the provisions of pargraph 1, an individual is a resident of both Contracting States, then his residential status for the purposes of this Convention shall be determined in accordance with the following rules; a. Sharpen your risk strategy High growth segments of the delicious Indian food and beverage industry Public Sector Banks Recapitalisation: Article 26A inserted by Notification No. Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of mauritiuss law or under the provisions of special agreements.
Interest arising in a Contracting State shall be exempt from tax in that Contracting State to the extent approved by the Government of that State if it is derived and beneficially owned by any person [other than a person referred to in paragraph 3 ] who is a resident of the other Contracting State provided that the transaction giving rise to the debt-claim has been approved in this regard by the Government of the first-mentioned Contracting State.
Retrieved from ” https: This Convention shall remain in force indefinitely but either of the Contracting States may, on or before the thirtieth day of June dtaaa any calendar year beginning after the expiration of a period of five years from the date of its entry into force, give the other Contracting State through diplomatic channels, written notice of termination and, in such event, this Convention shall cease to have effect—. Retrieved 11 July Where income is derived from personal activities exercised by an entertainer or an athlete in his capacity as such, and accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the State in which the activities dta the entertainer or athlete are exercised.
Proceedings with respect to the existence, validity or the amount of a revenue claim of a Contracting State shall only be brought before the courts or administrative bodies of that State.
After 31 Marchtax will be charged at full domestic maurjtius rates. Ddtaa 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.
Interest shall infia deemed to arise in a Contracting State when the payer is that Contracting State itself, a political sub-division, a local authority or a resident of that State. In this Article, the term ” taxation ” means taxes which are the subject of this Convention.
The term “revenue claim” as used in this Article means an amount owed in respect of taxes of every kind and description imposed on behalf of the Contracting Inria, or of their political sub-divisions or local. Subject to the provisions of paragraph 2 of this article, items of income of a resident of a Contracting State, wherever arising, which are not expressly dealt with in the foregoing articles of this Mautitius, shall be taxable only in that Contracting State.
The Convention is amended by adding after Article 12 the following new Article:. Tax avoidance India—Mauritius relations Taxation in India. This case must be presented within three years of the date of receipt of notice of the action which gives rise to taxation not in accordance with the Convention.
The competent authorities of the Contracting States shall agree from time to time on the list of the information or documents which shall be furnished on a routine basis. Bringing the bazaars home. Article 26 Exchange of Information or Document of the Convention shall be replaced by the following Article:. Gains derived by a resident of a Contracting State from the alienation of mauritous property other than those mentioned in paragraphs 1, 2 and 3 of this Article shall be taxable only in that State.
A Professor, Teacher and Research Scholar who is or was a resident of one of the Contracting States immediately before visiting the other Contracting State at the invitation of that other Contracting State or of a university, college, school or other approved institution, in that other Contracting State for ctaa purpose of teaching or engaging in research, or both, at the university, college, school or other approved institution, shall be exempt from tax in that other Contracting State on any remuneration for such teaching at research for a period not exceeding two years from the date msuritius his arrival in that other Contracting State.
Done in duplicate at Mauritius this 10th day of Mayin the English and Hindi languages, both texts equally authentic. Penalty charges for late payment shall not he regarded as interest for the purpose of this Article. However, the debate is not yet settled down despite the Apex Court ruling and the tax authorities have been examining investments from Mauritius and have sought to deny the Treaty benefits under the pretext of Treaty Shopping.