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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The phasing out of such tax benefits in the India Mauritius DTAA would mean that benefits in respect of capital gains from the sale of shares in an Indian company would no longer be available to Singapore residents after the new provisions come into effect on the 1 st of April In respect of India, incia Convention applies from the assessment year and onwards.

This seems to favour shareholders returns, as opposed to other countries which might still exempt entities of capital gains as stipulated in their DTAA with India but are taxed muritius a much higher rate domestically. The aim of a DTAA is to avoid double taxation, that is a company should not be taxable where the underlying assets are situated and also in its country of residence. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

Australia Sydney New Zealand. Home Forbes India India-Mauritius tax treaty: In addition, a revenue claim accepted by a Contracting State for the purposes of paragraph 3 or 4 shall not, in that State, have any priority applicable to that revenue claim under the laws of the other Contracting State. Paragraphs 3A and 3B inserted by Notification No. India made sure that it signed the amendments with Mauritius first; to make sure that others follow suit or are left drifted as GAAR which came into force 1 April The Maritius of the Republic of India and the Government of Mauritius, desiring to conclude 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: Why managers should reveal their failures.

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.

The tax standards prescribe greater transparency in reporting of business operations by companies and limit their ability to exploit tax arbitrage. Add to that factors like the significant experience gained in dealing with India, cultural and language synergies and even the convenient time zone, and we have the ingredients to remain a major player in the Indian market.

And whereas, the said Protocol entered into force on the 19 th day of July,being the date of the later of the notifications of the completion of the procedures as required by the respective laws for entry into force of the said Protocol, in accordance with paragraph 1 of Article 9 of the said Protocol.

Thank you for your comment, we value your opinion and the time you took to write to us! Where by reason of the provisions of paragraph 1a person other than an individual is a resident of both the Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated.


Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 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.

When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States. Are not a shell company and, Satisfy the main purpose and bonafide business test.

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. 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. 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.

Each of the Contracting States shall notify to the other the completion of the procedures required by its law for the bringing into force of this Protocol. Mon, Aug 28 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.

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. Experts said regulators are looking to curb so-called hot money.

Clarification regarding agreement for avoidance of double taxation with Mauritius. India Tax and advisory, business entry and consulting services. One will need to be cautious of the impact of this development on foreign flows, at least in the near term.

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. 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 relevant extract of the Circular No.

India, Mauritius set to hold fresh talks on DTAA amendments – Livemint

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 kauritius therein.

The provisions of Article 1, 2, 3, 5 and 8 of the Protocol shall have effect:. For the purposes of the credit referred to in paragraph 2 the term “Mauritius tax payable” shall be deemed to include any amount which would have been payable as Mauritius tax for any year but for an exemption or reduction of tax granted for that year or any part thereof under:.

If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated or, if there is no such home harbour, in the Contracting State of which the operator of the ship is resident.

Where under this Convention a resident of a Contracting State is exempt from tax in that Muritius State in respect of income derived from the other Contracting State, then the makritius Contracting State may, in calculating tax on the remaining income of that person, apply the rate of tax which would indja been applicable if the mquritius exempted from tax in accordance with this Convention had not been so exempted.


Income from immovable property may be taxed in the Contracting State in which such property is situated.

The Double Tax Avoidance Agreement between India and Mauritius

Clarification regarding agreement for avoidance of double taxation with Mauritius 1. Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreements. Please turn on JavaScript and try again.

No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. The provisions of Article 6 and 7 of this Protocol shall have effect from the date of entry into force of the Protocol, without regard to the date on which the taxes are levied or the taxable years to which the taxes relate.

Notwithstanding the provisions of paragraph 2dividends paid by a company which is a resident of Mauritius mzuritius a resident of India may be taxed in Tdaa 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.

India-Mauritius DTAA Revised

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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.

Notwithstanding the preceding provisions of this article, remuneration in respect of an employment exercised aboard a ship or aircraft in international traffic, may be taxed only in the Contracting State in which the place of effective management of the enterprise dtaaa situated.

The Double Tax Avoidance Agreement between India and Mauritius

Now, therefore, in exercise of the powers conferred by sub-section 1 of section 90 of the Income-tax Act, 43 ofthe Central Government hereby notifies that all the provisions of said Protocol, as annexed hereto as Annexure, shall be given effect to in the Union of India, in accordance with Article 9 of the said Protocol.

DONE on this 24th day of August, at Port Louis on two original copies each in Hindi and English languages, both the texts being equally authentic. India and Mauritius are set to begin a fresh round of negotiations to amend their double tax avoidance agreement DTAA. 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.

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.