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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Mauritius is the main provider of foreign direct investment FDI to India and also the preferred jurisdiction for Indian outward investments into Africa. This paragraph shall not affect the ondia of the company in respect mauritiuus the profits out of which the dividends are paid.
If he has such a fixed base, the income may be taxed in the other Contracting State but only so much of it as is attributable to that fixed base. This page was last edited on 22 Januaryat Agreement for Avoidance of Double Taxation and prevention of fiscal evasion with Armenia Whereas the annexed Convention between the Government of the Republic of India ddtaa the. The exchange of information or documents shall be either on a routine basis or on request with reference to particular cases or both.
Mauritius route – Wikipedia
Notwithstanding the provisions of paragraph 2, dividends paid by a company which is a resident of Mauritius to a resident of India may be taxed in Mauritius and according to the laws of Mauritius, as long as dividends paid by companies which are residents of Mauritius are allowed as deductible expenses for determining their taxable profits.
Article 13 4 of the DTAA confers the power of taxation of the gains derived by a resident of a contracting state from the alienation of specified property only in the state of residence i.
The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein or performs in that other State independent personal services from a fixed base situated therein and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base.
Most comparable jurisdictions do not tax capital gains mahritius portfolio investments and India is unique to that extent. A student or business apprentice who is or was a resident of one of the Contracting States immediately before visiting the other Contracting State and who is present in that other Contracting Mauritiius solely for the purpose of his education or training shall be exempt from tax in that other Contracting State on.
The Double Tax Avoidance Agreement between India and Mauritius
The provisions of paragraph 1 shall not be construed so as to impose on a Contracting State the obligation—. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. 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.
Subject to the provisions of articles 16, 17, 18, 19, 20 and 21, salaries, wages and other similar remuneration mauritiud by a resident of a Jauritius State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State.
The tax standards prescribe greater transparency in reporting of business operations by companies and limit their ability to exploit tax arbitrage. For the purposes of this article and article 20 an individual shall be deemed to be resident of a Contracting State if he is a resident in that Contracting State in the “previous year” or the “year of income”, as the case may be, in which he visits the other Contracting State or in the immediately preceding “previous year” or the “year of income”.
The term “pension” means a periodic payment made in consideration of past services or by way of compensation for injuries received in the course of performance of services. Nine of the 10 largest foreign business organizations or companies investing in India from April January are based in Mauritius.
Companies registered in Mauritius are the largest source of foreign direct investment FDI into India, making it crucial for New Delhi to upgrade its bilateral tax treaty, adopting the latest international practices that prevent multinational companies from artificially shifting profits to low tax countries.
The amount of Mauritius tax payable under the laws of Mauritius and in accordance with the provisions of this Convention, whether directly or by deduction, by a resident of India, in respect of profits or income arising in Mauritius, which has been subjected to tax both in India and in Mauritius, shall be allowed as a credit against the Indian tax payable in respect of such profits or income provided that such credit shall not exceed the Indian tax as computed before allowing any such credit mauritihs is appropriate to the profits or income arising in Mauritius.
Paragraph 4 deals with taxation of capital gains arising from the alienation of any property other than those mentioned in the preceding paragraphs and gives the right of taxation of capital gains only to that State of which the person deriving the capital gains is a resident. What does the Protocol say? Notwithstanding the provisions of paragraph 1 of this article, income derived by an entertainer or an athlete who is a resident of a Contracting State from his personal activities as such exercised in the other Contracting State, shall be taxable only in the first-mentioned Contracting State, if those activities in the other Contracting State, are dta wholly or substantially from the public funds of the first-mentioned Contracting State, including any of its political sub-divisions or local authorities.
Income derived by a resident of a Contracting State in respect of professional services or other independent activities of a similar character shall be taxable only in that State unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities.
For the purposes of this article, the term “Government” shall include any State Government or local or statutory authority of either Contracting State and, in particular, incia Reserve Bank of India and the Bank of Mauritius.
P-Notes are maurjtius issued by registered foreign institutional investors to overseas investors. However, subject to provisions of paragraphs 3, 3A and 4 of this Article, such interest may also be taxed in the Contracting State in which it arises, and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 7.
Orphaned articles xtaa September All orphaned articles. Limited Agreements Agreement for avoidance of double taxation of income of enterprises operating aircraft with Afghanistan Whereas the Government of India and the Government of Afghanistan have.
The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, oil-wells, quarries and other places of extraction of natural resources, ships, boats and aircraft shall not be regarded as immovable property.
For the purposes of the credit referred to in paragraph 4the term “Indian tax payable” shall be deemed to include any amount by which tax has been reduced by the special incentive measures under—.
Nothing contained in this Article shall be construed as obliging a Contracting State to grant persons not resident in that State any personal allowances, reliefs, reductions and deductions for taxation purpose which are by law available only to persons who are so resident. Remuneration, other than pension, paid by the Government of a Contracting State, to an individual who is a national of that State in respect of services rendered to that State shall be taxable only in that State.
Notwithstanding the provisions of paragraphs 1 and 2 of this Article, a person acting in a Contracting State for or on behalf of an enterprise of the other Contracting State other than an agent of an independent status to whom the provisions of paragraph 5 apply shall be deemed to be a permanent establishment of that enterprise in the first-mentioned State if: The provisions of paragraphs 12 and 3 shall not apply if the beneficial owner of the dividends, being a resident of the Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein or performs in that other State independent personal services from a fixed base situated therein and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base.
For the purpose of paragraph 1″approved institution” means an institution which has been approved in this regard by the competent authority of the concerned Contracting State. For the purposes of this Convention, unless the context otherwise requires: Where, by reason of a special relationship between the payer and the recipient or between both of them and some other person, the amount of royalties paid, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this article shall apply only to the last-mentioned amount.
Further, where such resident is a company by which surtax is payable in India, the credit aforesaid shall be allowed in the first instance against income-tax payable by the company in India and as to the balance, if any, against surtax payable by it in India.
The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to mauriitus permanent establishment.
However, the protocol will impact all prospective investments with effect from April 1, Notwithstanding the provisions of paragraphs 3 and 4, a revenue claim accepted by a Contracting State for purposes of paragraph 3 or 4 shall not, in that State, be subject to the time limits or accorded any priority applicable to a revenue claim under the laws of that State by reason of its nature as such. Notwithstanding the provisions of paragraph 2 of this Article, gains from the alienation of ships and aircraft operated in international traffic and movable property pertaining to the operation of such ships and aircraft, shall be taxable only in the Contracting State in which the price of effective management of the enterprise is situated.
The competent authorities of the Contracting States shall notify to each other any significant changes which are made in their respective taxation laws.
Bilateral talks were necessitated after Mauritius in July excluded the India-Mauritius DTAA from the scope of a multilateral deal brokered by the Organisation for Economic Cooperation and Development OECD aimed at upgrading all existing bilateral tax treaties of participating nations to the latest anti-tax avoidance norms. Through this blog EY will provide viewpoints, commentary on trends and the delivery of fresh perspectives to evolving issues relevant to executive decision makers.
They may also consult together for the elimination of double taxation in cases not provided for in the Convention. When a revenue claim of a Contracting State is a lndia in respect of which that State may, under its law, take measures of conservancy with a view to ensure its infia, that revenue claim shall, at the request of the competent authority of that State, be accepted for purposes maugitius taking measures of conservancy by the competent authority of the other Contracting State.
They may also consult together for in the elimination of double taxation in cases not provided for the Convention. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.