Mauritius promises India on resolving differences on tax treaty

Mauritius has assured India to look into the controversial aspect of its tax treaties, which is offered to businessmen in India to use the island as a support for investments in Africa. On India’s demands for reworking the Double Taxation Avoidance Agreement (DTAA), Mauritius Foreign Minister Arvin Boolell said, ‘if there is room for improvement, we will constantly make room for improvement, of course, in respect and in compliance with the best international practices.’

In a meeting between External Affairs Minister of India, S M Krishna, Boolell also pointed out the importance of Mauritius as a springboard by entrepreneurs of India into Africa. According to the India-Mauritius tax treaty, capital gains that are made in India from investment in the country is not taxed in the Island nation of Mauritius, due to this, investment made though this route avoid the tax payment.

A large chunk of investments made in India are routed through Mauritius in order to avoid the tax payment, which has compelled the Indian government to implement the General Anti-Avoidance Rules (GAAR) so as to prevent misuse of tax treaty.

Boolell said to sort out differences related to tax treaties, the Joint Working Group set up by the two countries on DTAA would meet from August 22-24. In response Krishna said that the nation would assist Mauritius in surveillance of its Exclusive Economic Zone and continue joint efforts to fight piracy, which he described as an expanding menace.