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?. Recent news of India and Mauritius signing a Protocol to amend their 33 year old tax treaty caused seismic changes in the tax world. Though not completely. India and Mauritius have concluded negotiations with respect to the double tax avoidance agreement (India-Mauritius DTAA) between the two countries.

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Whereas, a Protocol amending the agreement between mairitius Government of the Republic of India and the Government of Mauritius, signed on 24 th August, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains, and for the encouragement of mutual trade and investment, hereinafter referred to as the said Protocol as set out in the Inda to this notification, was signed at Mauritius on the 10 th day of May.

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. 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.

A side effect of this change might be a surge in investments from Mauritius based entities to take benefit of the grandfathering clause. The provisions of Article 1, 2, 3, 5 and 8 of the Protocol shall have effect:. Article 12A inserted by Notification No. For the purposes of this Convention, the term “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 of management or any other criterion of similar nature.

As India opened the doors of its economy to foreign investment inDta became a favourite jurisdiction for channelling investments into India. As per the information available, the benefit of the reduced tax rates will be available to those Mauritius entities who: Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by that permanent establishment, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment is situated.


The mauritiuss of the protocol that has been signed by the two countries is to remove the residence based taxation regime for capital gains and replace it with a source based regime. 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:.

Significantly, this development also blunts the impact of the much condemned GAAR, which would have conflicted with the capital gains exemptions under the Mauritius and Singapore treaties.

A significant side effect of this amendment will be felt in the India Singapore DTAA which has a clause that provides tax benefits in respect of capital gains to Singapore based companies. Tax experts said Singapore may have an edge over Mauritius because of better dtaq.

The New Mauritius-India DTA – Still the Best Route to India | Vistra

International Business World News. Despite recent changes Mauritius remains the most competitive jurisdiction for investment into India.

Mauritius has benefitted from rather generous terms in this DTA with India for mauritiius. In no case shall the provisions of this Article be construed so as to impose on a Contracting State the obligation: Paragraph 3 inserted by Notification No. The tax payer is entitled in law to seek the benefit under the DTAA if the provision therein is more advantageous than the corresponding provision in the domestic law. The provisions of Article 1, 2, 3, 5 and 8 of the Protocol shall have effect: Get instant notifications from Economic Times Allow Not now You can switch off notifications anytime using browser settings.

India-Mauritius DTAA Revised | CNK RK & Co, Chartered Accountants

This Protocol shall enter into force on the date of the later of these notifications. Never miss a great news story!

This Convention shall apply to persons who are residents of one or both of the Contracting States. Fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. The existing taxes to which this Convention shall apply are: The Income Tax Department appeals to taxpayers NOT to respond to such e-mails and NOT to share information relating to their credit card, bank and maurtius financial accounts.

Agreement for avoidance of double taxation with Mauritius — Indis regarding. Fill in your details: Publications Vistra Corporate Brochure.


India-Mauritius DTAA Revised

File Divorce in Delhi – Right Now! However, the tax charged shall not exceed the rate of the Mauritius tax on profit of the company ,auritius the dividends. 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.

Such persons or authorities shall use the information only for such purposes. GAAR seeks to give the Indian authorities powers to scrutinise transactions structured in such a way as to deliberately avoid paying tax in India.

This 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, maugitius such event, this Convention shall cease to have effect—.

After Mauritius, Cyprus was next Novemberand on the last day ofit was Singapore. Article 26A inserted by Notification No. Read next Thursday, 20 December. To protect investments already made, the protocol of the India-Mauritius DTAA allows for a grandfathering clause whereby gains arising from the sale of shares acquired before 1 st of April shall continue to be taxed as per the old article 13 4 and will be able to enjoy tax benefits as afforded by Mauritius.

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 Gains from the alienation of shares acquired on or after 1st April in a company which is resident of a Contracting State may be taxed in that State.

Gains derived by a resident of a Contracting State from the alienation of any property other than those mentioned in paragraphs 12 and 3 of this article shall be taxable only in that State. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.