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OECD Global Forum - Supplementary Report on Mauritius
The OECD Global Forum on Transparency and Exchange of Information on Tax brought together delegates from 85 countries and 7 international organisations in Cannes, France last week 26 October 2011 at the G20 summit. They adopted a progress report on 59 jurisdictions based on completed peer reviews. In April 2009, the OECD Global Forum on transparency and exchange of information published a progress report on several jurisdictions. Mauritius was included in the list of jurisdictions that have substantially implemented the internationally agreed tax standard, commonly known as the white list. Taxand Mauritius looks at the background of the report and how Mauritius stands to gain as part of the OECD.
Following this, the OECD conducts peer reviews in two phases; phase 1 on legal and regulatory framework and phase 2 assesses the application of the standards in practice, where it focuses on the effectiveness of Exchange of Information. Mauritius was subjected to a combined review of phases 1 & 2. A progress report was issued on 28 January 2011 which set out recommendations and determinations. In short, the assessors identified some doubts regarding Mauritius ability to exchange information as there was not enough data to corroborate with the legal framework and the mechanism in place. They concluded that a further review needed to be done, which culminated in the supplementary report issued on 26 October 2011.
Mauritius has now shown that it has gained experience in exchanging tax information when requested. It is also upgrading its tax treaty network to incorporate paragraph 4 and 5 of article 26, exchange of information of the OECD model, as well as entering into tax information exchange of information where a tax treaty is not in place. The Mauritius Revenue Authority has also set out a procedure manual on exchange of information and now prescribes that any request for exchange of information has to be assessed within a period of 90 days. The supplementary report confirms that progress has been made with amendments to the law to allow for more transparency, but some more work needs to be done in cases concerning non resident trusts and societes de personne. In a nutshell, most of the recommendations given in the progress report have now been addressed but the assessors believe that six months is a short time to properly evaluate the mechanism set out in phase.
This is welcome news which reinforces the message that Mauritius is accepted by OECD as having the legislation and the mechanism for transparency and exchange of information on tax matters. It is important to emphasise that exchange of information can only be done through the competent tax authorities and fishing expeditions are not tolerated. Currently Mauritius has an exchange of information article in its tax treaties but can be upgraded to the OECD model through either renegotiation or protocols. It also has tax information exchange agreements with some countries where tax treaties are not in place.
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