10/04/19

MAURITIUS: Double tax avoidance pact based on OECD model.

As published on thehindubusinessline.com, Tuesday 9^th April, 2019.

The Economic Development Board of Mauritius has stressed that the country is compliant with all OECD norms and its model double tax avoidance pact is based on the OECD model, developed after years of best practices.

“Mauritius is compliant with all OECD norms, including the Global Forum on Transparency and Exchange of Information for Tax Purposes, the Base Erosion and Profit Shifting project, and the Common Reporting Standard,” the EDB said in a statement on Tuesday, adding that companies operating in Mauritius are subject to stringent substance requirements, including minimum of number of resident directors, full-time employees, expenditure, and principal bank accounts in Mauritius.

It also underlined its commitment to fully collaborate with international norm-setting organisations at all levels.

The statement comes as the two-year transition period for the new India and Mauritius double tax agreement came to an end. Starting April 1, capital gains on investments made in India from Mauritius and Singapore now attract full tax.

India and Mauritius had signed a reworked tax treaty in 2016 that allowed India to impose capital gains tax on shares sold in Indian companies post April 2017. While existing investments of the time were to be grandfathered, the treaty also provided a two year transition period until March 31 this year when tax rates would be half the domestic rates.

Trying to clear misconceptions, the Mauritius EDB further said investments through Mauritius into India have gone in productive and sustainable sectors, including healthcare, housing, infrastructure, telecommunications, and education, amongst others while Indian companies have also used the provisions of the tax treaty for investments.

It also highlighted trade and investment ties between the two countries. “The total imports from India to Mauritius amounts to nearly Mauritius Rupee 30 billion, while exports from Mauritius to India is around Mauritius Rupee 512 million,” it said.

It also underlined its commitment to fully collaborate with international norm-setting organisations at all levels.