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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Where by reason of the provisions of paragraph 1an individual is a resident of both Contracting States, then his residential status for the purposes of the Convention shall be determined in accordance with the following rules:.

However, subject to the provisions of paragraphs 3 and 4 of this article, such interest may also be taxed mauitius the Contracting State in which it arises and according to the laws of that State.

This Convention shall also apply to any identical or substantially similar taxes which are ibdia by either Contracting State after the date of signature of the present Convention in addition to, or in place of, the existing taxes referred to in paragraph 1 of this article. What does the Protocol say? However, rumblings from the Indian authorities mauirtius regard to the alleged ‘abuses’ are still continuing in and and it was announced in June that discussions between the two countries to amend the treaty are to commence soon.

The existing taxes to which this Convention shall apply are:. This could help even India-focussed funds, which could look at open-ended structures that investors could enter and exit at any point. Paragraphs 3A and 3B inserted by Notification No.

The cases of legal entities not having bona fide business activities shall be covered by Article 27A 1 of the Convention. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State nor subject the company’s undistributed profits to a tax on the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

During a visit to Mauritius, Prime Minister Modi raised the question of treaty re-negotiation. Two people with knowledge of communications between Delhi and Port Louis, on condition of anonymity, separately said talks to upgrade the DTAA will start soon.


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. Two years after India renegotiated its double taxation avoidance agreements DTAAs with Singapore and Mauritius, the two face the possibility of their importance as investment channels to the country fading. The provisions of paragraphs 1 and 2 of this article shall not apply to remuneration and pensions in respect of services rendered in connection with any business carried on by the Government of either of the Contracting States for the purpose of profit.

International Taxation >Double Taxation Avoidance Agreements

The competent authorities of the Contracting States may by mutual agreement settle the mode of application of this Article. Article 11 Interest of this Convention shall be amended by:. The new regulations may not be ideal but Mauritius remains a very competitive jurisdiction for Indian investments for the following reasons: The term “permanent establishment” shall include—.

India and Mauritius are set to begin a fresh idia of negotiations to amend their double tax avoidance agreement DTAA.

A resident of a Contracting State shall not be entitled to the benefits of Article 13 3B of this Convention if its affairs were arranged with the primary purpose to take advantage of the benefits in Article 13 3B of this Convention.

The Double Tax Avoidance Agreement between India and Mauritius

Making women feel complete again. 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.

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.

The DTAA, meant to prevent double taxation of the same income in both the countries, had actually resulted in income escaping tax in both the countries, a practice referred to as double non-taxation. Prior to its substitution, said paragraph read as under:. SO E [NO.

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

Read next Thursday, 20 December. This assistance is not restricted by Article 1 and 2.

Agreement for avoidance of double taxation and prevention of fiscal evasion with Australia Whereas the annexed Agreement between the Government of the Republic of India and the. Article 5 Permanent Establishment of the Convention shall be amended by inserting in paragraph 2 the following new sub-paragraph:.

However, the tax charged shall not exceed the rate of the Mauritius tax on profit of the company paying the dividends. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. DTAAs are termed in such a way that the entity is only taxable in its country of residence.


That revenue claim shall be collected by that other State in accordance with the provisions of its laws applicable to the enforcement and collection of its own taxes as if the revenue claim were a revenue claim of that other State.

In respect of India, the Convention applies from the assessment year and onwards. The treaty provides for a capital gains tax exemption to a Mauritius resident on transfer of Indian securities. Prior to its substitution, said Article read as under:.

The prime minister indicated that the DTA was going to be incia but he also committed that the Mauritius interests would not harmed in any way.

July 24 July, Copyright Registration ph no: This article shall not apply to income from research if the research is undertaken primarily for the private benefit of a specific person or persons.

Politically, this would be viewed as an achievement for the Government.

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. Foul language Slanderous Inciting hatred against a certain community Others. Each of the Contracting State shall notify to the other completion of the procedures required by its law for the bringing into force of this Convention. ANNEXURE The Government of the Republic of India and the Mauditius of Mauritius, desiring to msuritius a Convention 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: The term “revenue claim” as used in this Article means an amount owed in respect of taxes of every kind invia description imposed on behalf of the Contracting States, or of their political sub-divisions or local.

Why managers should reveal their failures. 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 Ibdia of which the person deriving the capital gains is a resident. Prior to its omission, said sub-paragraph read as under: