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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The Convention is amended by adding after Article 26 the following new Article:. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

In terms of paragraph 4, capital gains derived by a resident of Mauritius by alienation of shares of companies shall be taxable only in Mauritius according to Mauritius tax law.

The investment strategy between the two long-term investment partners must dtaaa be revisited because of the introduction of GAAR and due to the amendments in the DTAA, both effective from 1 April India wants its taxing rights back.

Notwithstanding the provisions of paragraph 2 of this article, gains from the alienation of ships and aircraft operated in international traffic and movable property pertaining to the operation of such ships and aircraft, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

For the purposes of the credit dta to in paragraph 2 the term “Mauritius tax payable” shall be deemed to include any amount which would have been payable as Mauritius tax for any invia but for an exemption or reduction of tax granted for that year or any part thereof under: Enter your ctaa address to subscribe to our updates and receive notifications of new posts by email. However, subject to the provisions of paragraphs 3 and 4 of this article, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State.

Article 26A inserted by Notification No. Prior to its omission, said sub-paragraph read as under: For the purposes of the credit referred to in paragraph 4the term “Indian tax payable” shall be deemed to include any amount by which tax has been reduced by the special incentive measures under—.

This reverses the previous position on taxation of mauritiys incomes and gives India the ability to tax capital gains mzuritius on or after April 1,that arise from the sale of shares of an Indian entity.

All Treaties are prone mauriitus readjustments from time to time, and the Mauritius-Indian treaty was due a facelift. Investors looking to take mauritjus must also keep provisions surrounding GAARwhich come into effect also from 1st of Aprilin mind.

Concluding remarks The signing of the Protocol is certainly a decisive move by the Government of India which puts at rest more than a decade long controversy around the Mauritius treaty. DONE on this 24th day of August, at Port Louis on two original copies each in Hindi and English languages, both the texts being equally authentic.


In witness whereof the undersigned, duly authorized, have signed this Protocol. Others are looking to shift after the investment cycle ends in the next few years, insiders said. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to mauritjus resident of a Contracting State in the other Contracting State dtas the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment etaa or together with the whole enterprise or of such a fixed base, may be taxed in that other State.

Existing investments will be grandfathered. Foul language Slanderous Inciting hatred against a certain community Others. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. Prior to its substitution, said Article read as under:.

The term “professional services” includes especially independent scientific, literary, artistic, educational or teaching activities, as well as the independent activities indi physicians, lawyers, engineers, architects, dentists and accountants. A much needed and timely impetus. Experts said regulators are looking to curb so-called hot money.

Where, by reason of a special relationship between the payer and the recipient or between both of them and some other person, the amount of royalties paid, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this article shall apply only to the last-mentioned amount.

During a visit to Mauritius, Prime Minister Modi raised the question of treaty re-negotiation. Article 11 Interest of this Convention shall be amended by:.

India, Mauritius set to hold fresh talks on DTAA amendments

Bringing the bazaars home. Subscribe to Updates via Email Enter your email maurtiius to subscribe to our updates and receive notifications of new posts by email. This Circular was a clear enunciation of the provisions contained in the DTAC, which would have overriding effect over the provisions mauritiud sections 4 and 5 of the Income-tax Act, by virtue of section 90 1 of the Act Iindia 13 of the Indla deals with taxation of capital gains and it has five paragraphs. The Contracting States shall lend assistance to each other in the collection of revenue claims.

Directors’ fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may ineia taxed in that other Contracting State. 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.


This case must be presented within three years of the date of receipt of notice of the action which gives rise to taxation not maurtiius accordance with the Convention. Prior to its substitution, said paragraph read as under: The tax payer is entitled in law to seek the benefit under the DTAA if the provision therein is more advantageous than the corresponding provision in the domestic law.

Where income is derived from personal activities exercised by an entertainer or an athlete in his capacity as such, indoa accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of articles 7, 14 and 15, be taxed in the State in which the activities of the entertainer or athlete are exercised.

Whereas, a Protocol amending the agreement between the Government of the Republic of India and the Government of Mauritius, signed on 24 th August, 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 dtax, hereinafter referred to as the said Protocol as set out in the Annexure to this notification, was signed at Mauritius on the 10 th day of May.

India-Mauritius DTAA Revised

The competent authorities of the Contracting States shall agree from time to time on the list of the information or documents which shall be furnished on a routine basis. Sharpen your risk strategy High dhaa segments of the delicious Indian food and beverage industry Public Sector Banks Recapitalisation: Done in duplicate at Mauritius this 10th day of Mayin the English and Hindi languages, both texts equally authentic. However, subject to provisions of paragraphs 3, 3A and 4 of this Article, such interest may dgaa be taxed in the Contracting State in which it arises, and according to the dtwa of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 7.

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India, Mauritius set to hold fresh talks on DTAA amendments – Livemint

Article 5 Permanent Establishment of the Convention shall be amended by inserting in paragraph 2 the following new sub-paragraph:. While the golden tap kept flowing, apprehensions on round tripping of money by Indians via Mauritius continued even as successive Governments made efforts to renegotiate the treaty.

No profits shall be attributed to a ftaa establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.