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Mauritius to address India's concerns over tax treaty
The Mauritius Prime Minister, Honourable Navinchandra Ramgoolam, was among the few Head of States invited at the swearing-in ceremony for the new government in India. Mauritius is the only non-member country of the South Asian Association for Regional Cooperation invited by the new Indian government to attend the swearing-in ceremony, reaffirming the strong bilateral relationship between the two nations. Taxand Mauritius explores the impact of this meeting on the two nations' double tax treaty.
Following the ceremony, the Mauritius Prime Minister had the opportunity to meet with the Indian Prime Minister, Narendra Damodardas Modi. The meeting was reportedly cordial with nothing being done unilaterally by India to harm the Double Tax Avoidance Agreement.
The major concern of India is the use of round tripping structures in Mauritius and potential abuse of the treaty. To that end reassurance has been given that automatic exchange of information would be in place and a Limitation of benefit (“LoB”) clause inserted in the treaty to address the above concern. To ensure speedy resolution, the Prime Minister advised that there would be two cells set up at the level of the two Prime Minister Offices so that talks can be ngaged and resolved.
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Also published in Thomson Reuters' Taxnet Pro, 05 June 2014
Emphasising that both countries need to go beyond Double Taxation Avoidance consideration, the Mauritius Prime Minister added there are significant prospects in the ‘ocean economy’ matters for both India and Mauritius. The Mauritius Prime Minister has also extended an official invitation to Mr Narendra D Modi to visit Mauritius. Multinationals should stay abreast of any changes to ensure compliance and any opportunities are maximised.