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INDIA MAURITIUS DTAA PDF

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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As of date such incomes are exempt from Interest in India. The protocol gives India the right to tax capital gains on transfer of Indian shares acquired on or after 1 April Photo: However, the debate is not yet settled down despite the Apex Court ruling and the tax authorities have been examining investments from Mauritius and have sought to deny the Treaty benefits under the pretext of Treaty Shopping.

The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property. The term “operation of ships or aircraft” shall mean business of transportation of persons, mail, livestock or goods, carried on by the owners or lessees or charterers of the ships or aircraft, including the sale of tickets for such transportation on behalf of other enterprises, the incidental lease of ships or aircraft and any other activity directly connected with such transportation.

In other words, the circular shall prevail even if inconsistent with the provisions of the Income-tax Act,in so far as assessees covered by the provisions of the DTAC are concerned.

Where the correct amount of profits attributable to a permanent establishment cannot be readily determined or the determination thereof presents exceptional difficulties, the profits attributable to the permanent establishment may be estimated on a reasonable basis.

The provisions of Article 1, 2, 3, 5 and 8 of the Protocol shall have effect: In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

India and Mauritius are set to begin a fresh round of negotiations to amend their double tax avoidance agreement DTAA to ensure that capital flows into India meet the latest global standards meant to check aggressive tax planning. In this article, the term “taxation” means taxes which are the subject of this Convention. Others are looking to shift after the investment cycle ends in the next few years, insiders said. For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of similar nature.

Desiring to amend the Convention between the Government of the Republic of India and the Government of Mauritius 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, signed at Port Louis on 24 th August, hereinafter referred to as “the Convention”.

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.

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To protect investments already made, the protocol of the India-Mauritius DTAA allows for a grandfathering clause whereby gains arising from the sale of shares acquired before 1 st of April shall continue to be taxed as per the old article 13 4 and will be able to enjoy tax benefits as afforded by Mauritius.

Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Convention, he may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. Article 13 4 of the DTAA provides that the profits made by a resident of a contracting state from the alienation of shares shall be taxable only in that state.

The benefits are still potent enough to keep Mauritius an attractive route into India but it is shared more equitably.

Article 27A inserted by Notification No. 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 Draa State in which the place of effective management of the enterprise is situated. KKR, Blackstone, Brookfield, Multiples, Bain and Apollo have evaluated their tax indua, according to people with knowledge of the matter.

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: Prior to its omission, said sub-paragraph read as under:.

Fees for technical services shall be deemed to arise in a Contracting State when the payer is that State itself, dhaa political sub-division, a local authority, or a resident of that State. The present Government came to power promising action on black money stashed abroad. 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.

Article 13 4 of the DTAA confers the power of taxation of the gains derived by a resident of a contracting state from the alienation of specified property only in the state of residence i.

India-Mauritius tax treaty: An end and a new beginning

Remuneration, other than pension, paid by the Government of a Contracting State, to an individual who is a national of that State in respect of services rendered to that State shall be taxable only in that State. Where, however, the person paying the fees for technical services, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the fees for technical services was incurred, and such fees for technical services are borne by such permanent establishment or fixed base, then such fees for technical services shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.

ANNEXURE The Government 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: Conclusion All Treaties are prone to readjustments from time to time, and the Mauritius-Indian treaty was due a facelift. Mauritius has a historical association with India which forms mayritius basis of an exceptionally good relationship between the countries and investors will continue to benefit from that Mauritius has over 25 years indja working experience in the Indian market Mauritius is ideally positioned midway between Europe and India, ,auritius good communication among the parties within any business day Mauritius remains a very cost effective jurisdiction with a highly qualified workforce now trained to deal with quite a foreign Indian market.

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Dyaa looking to take benefit must also keep provisions surrounding GAARwhich come into effect also from 1st of Aprilin mind. 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:.

As we mauritiks pointed out, Circular No. What does the Protocol say? The Government of the Republic of India and the Government of Mauritius, desiring to conclude a Convention for the avoidance of mauditius 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: Where a company which is a resident of a Contracting State derives profits or income mautitius 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 dtqa profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

This Protocol shall enter into force on the date mauritiue the later of these notifications. The exchange of information or documents shall be either on a routine basis or on request with reference to particular cases or both.

International Taxation >Double Taxation Avoidance Agreements

Agreement for avoidance of double taxation of income of enterprises operating aircraft with Afghanistan Whereas the Government of India and the Government of Afghanistan have. The competent authorities of the Contracting States may by mutual agreement settle the mode of application of this Article.

The term “professional services” includes especially independent scientific, literary, dtaa, educational or teaching activities, as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

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. Proceedings with respect to the existence, validity or the amount of a mmauritius claim of a Contracting State shall only be brought before the courts or administrative bodies of that State.