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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Government of India, Ministry of Commerce maurritius Industry. Article 13 4 of the DTAA provides that the profits made by a resident of a contracting state from the alienation of shares shall be taxable only in that state.
The existing taxes to which this Convention shall apply are:. 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.
What the changes in the tax treaty with Mauritius mean for India, investors
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 purposes which are by law available only to persons who are so resident. Clarification regarding agreement for avoidance of double taxation with Mauritius. However, the tax charged shall not exceed the rate of the Mauritius tax on profits of the company paying the dividends.
Done on this 24th day of August, at Port Louis on two original copies each in the Hindi and English Languages both the texts being equally authentic. Interest shall be 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 Mauritius, in respect of income and capital gains assessable for any assessment year commentcing on or after 1st July, Mauritius is the main provider of foreign direct investment FDI to India and also the preferred jurisdiction for Indian outward investments into Africa.
Any agreement reached shall be implemented notwithstanding any time limits in the laws of the Contracting States. While the golden tap kept flowing, apprehensions on round tripping of money by Indians via Mauritius continued even as successive Governments made efforts to renegotiate the treaty.
A Convention for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes of income and capital gains was entered into between the Government of India and the Government of Mauritius and was notified on When a revenue claim of a Contracting State is a claim in respect of which that State may, under its law, take measures of conservancy with a view to ensure its collection, that revenue claim shall, at the request of the competent authority of that State, be accepted for purposes of taking measures of conservancy by the competent authority of the other Contracting State.
The Convention is amended by adding after Article 27 the following new Article:. 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 Wall Street Journal. 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 Act 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.
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.
The provisions of Article 1, 2, 3, 5 and 8 of the Protocol shall have effect:.
In respect of India, the Convention applies from the assessment year and onwards. Where, at any time after a request has been made by a Contracting State under paragraph 3 or 4 and before the other Contracting State has collected and remitted the relevant revenue claim to the first-mentioned State, the relevant revenue claim ceases to be —.
Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. The term “interest” as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage, and whether or not carrying a right to participate in the debtor’s profits, and, in particular, income from Government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures.
For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of the enterprise is wholly or partly carried on.
Notwithstanding the preceding provisions of this article, the term “permanent establishment” shall be deemed not to include:. The profits of an enterprise of a Contracting State shall be incia only in that State unless the enterprise carries on business in the other Contracting State lndia a permanent establishment situated therein.
This Convention shall apply to persons who are residents of one or both of the Contracting States. The treaty provides for a capital gains tax exemption to a Mauritius resident on transfer of Indian securities.
India, Mauritius set to hold fresh talks on DTAA amendments – Livemint
Where by reason of the provisions of pargraph 1, an individual dgaa 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. Any information received under paragraph 1 by a Contracting State shall be treated maurutius secret in the same manner as information obtained under the domestic laws of that Contracting State and shall be disclosed only to persons or authorities including courts and administrative bodies concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the indka referred to in paragraph 1, or the oversight of the above.
In witness whereof the undersigned, being duly authorised thereto, have signed the present convention. 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.
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 the 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 or research for a period not exceeding two years from the date of his arrival in that other Contracting State.
The Contracting States shall lend assistance to each other in the collection of revenue claims. The term “fees for mauritiius 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. The term ‘ dividends ‘ as used in this Article means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the Contracting State of which the company making the distribution is a resident.
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. A student or business apprentice who is or was a resident mauritiuw one of the Contracting States immediately before visiting the other Contracting State and who is present in mauritiks other Contracting State solely for the purpose of his education or training, shall be exempt from tax in that other Contracting State on—.
India-Mauritius tax treaty: An end and a new beginning | Forbes India Blog
In such case, the provisions of article 7 or article 14, as the case may be, shall apply. 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 and the. The Convention shall remain in force indefinitely but either of the Contracting States may, on or before the thirtieth day of June in 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: The exchange of information or documents shall be either on a routine basis or on request with reference to particular cases or both.
Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment alone or together with the whole enterprise or of such a fixed base, may be taxed in that other State.