Negotiations on DTAA between India and Mauritius in advanced stages: Revenue Secretary
Finance Ministry has informed that the negotiations on the double taxation avoidance agreement (DTAA) between India and Mauritius are in advanced stage and the pact would be revised soon. Revenue Secretary Shaktikanta Das has said that “DTAA treaty (with Mauritius) is in very advanced stage of negotiation. It is progressing in a very constructive manner. And we expect it would be concluded in the near future.”
Last month, Mauritius had submitted a draft protocol to be used as a basis to finalise the discussions. Negotiations to amend the Indo-Mauritius double taxation avoidance convention have been hanging fire for a long time amid concerns that Mauritius is being used for round-tripping of funds into India. Mauritius has though said that the country has put in place a stronger anti-black money laws and a mechanism to stop round-tripping to India.
The DTAA between the two nations was signed in 1983 and has been allegedly used by the companies for evading taxes through round tripping. Under the DTAA, capital gains on sale of assets in India by companies registered in Mauritius can only be taxed in Mauritius. While short-term capital gains are taxed at 10 per cent in India, they are exempt in Mauritius. Mauritius is one of the top sources of FDI into India. Investments from Mauritius to India have totaled $87.55 billion since April, 2000.