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?. New Delhi: India and Mauritius are set to begin a fresh round of negotiations to amend their double tax avoidance agreement (DTAA) to ensure. The Double Tax Avoidance Agreement (herein referred as “DTAA”) entered into between India and Mauritius provides for potential tax exemption to the foreign.
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When that happens, the provisions of such an agreement, with respect of cases to which where they apply, would operate even if inconsistent with the provisions of the Income-tax Act.
This Convention shall apply to persons who are residents of one or both of the Contracting States.
This approach has resulted in significant long-drawn litigation in a number of cases involving investments in India through Mauritius.
The exchange of information or documents shall be either on a routine basis or on request with reference to particular cases or both. However, such royalties may also be taxed in the Contracting State in which they arise, and according to the law of that State, but the tax so charged shall not exceed 15 per cent of the gross amount of the royalties.
In the case of a dividend paid by a company which is a resident of India to a company which is a resident of Mauritius and which owns at least 10 per cent of the shares of the company paying the dividend, the credit shall take into account in addition to any Indian Tax for which credit may be allowed under the provisions of sub-paragraph a of this paragraph the Indian tax payable by the company in respect of the profits out of which such dividend is paid.
India and Mauritius are set to begin a fresh round of negotiations to amend their double tax avoidance agreement DTAA. Article 26 Exchange of Information or Document of the Convention shall be replaced by the following Article:.
The existing taxes to which this Convention shall apply are: Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreement.
India, Mauritius set to hold fresh talks on DTAA amendments
Where a resident of a Contracting State considers that the actions of one or both of the Contracting Maurituus 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 mauditius to the competent authority of the Contracting State of mauritiua he is a resident.
Interest arising in a Contracting State shall be exempt from tax in that State provided it is derived and beneficially owned by: The term enterprise of a Contracting State’ and ‘ enterprise of the other Contracting State’ mean respectively an industrail, mining, commercial plantation or agricultural enterprise or similar under taking carried on by a resident of a Contracting State and an industrial, mining, commercial, planta tion or agricultural enterprise or similar undertaking carried on by a resident of the other Contracting State; h.
The term ” annuity ” means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequte and full consideration in money or money’s worth. The cases of legal entities not having bona fide business activities shall be covered by Article 27A 1 of the Convention.
The provisions of paragraph 1 of this article shall likewise apply in respect of remuneration paid under a development assistance programme of a Contracting State, out of funds supplied by that State, to a specialist or volunteer seconded to the other Contracting State with the consent of that other State. The term “royalties” as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, and films or tapes for radio or television broadcastingany patent, trade mark, design or model, plan, secret formula or process or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience.
The India-Netherlands treaty is a smart treaty, and it can emerge as a preferred alternative for FIIs especially those in Europe. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.
Paragraph 2 substituted by Notification No.
What the changes in the tax treaty with Mauritius mean for India, investors
In respect of India, the Convention applies from the assessment year and onwards. A student or business apprentice who is or was a resident of one of the Contracting States immediately before visiting the other Contracting State and who is present in that other Contracting State solely for the purpose of his education or training, shall be exempt from tax in that other Contracting State on—.
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 Contracting State in which the place of effective management of the enterprise is infia.
Clarification regarding agreement for avoidance of double taxation with Mauritius 1. The Government also deserves to be applauded for giving sufficient notice of close to a year before the change takes effect as well as providing protection to existing investments. The term “immovable property” shall be defined in accordance inria the law and usage of maurotius Contracting State in which the property is situated.
That revenue claim shall be collected by that other State in accordance with the provisions of its laws applicable to the enforcement and collection of its own taxes as if the revenue claim were a revenue claim of that other State.
Proceedings with respect to the existence, validity or the amount of a revenue claim of a Contracting State shall only be brought before the courts or administrative bodies of that State. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and accordingly to the laws of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed: The provisions of paragraph 1 of this Article shall also apply to profits from the participation in a pool, a joint business or an international operating agency.
The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein and the right or property in respect maurittius which the income is paid is effectively connected with such permanent establishment or fixed base.
This case must be presented within three years of the date of receipt of notice of the action which gives rise to taxation not in accordance with the Convention. Experts feel that while some mmauritius who are bullish on India may advance their plans and invest before April 1, in order to save tax, many others will raise their due diligence procedure on investments, factoring in the tax cost in the returns they generate. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the fees for technical services exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount.
In no case shall the provisions of this Article be construed so as to impose on a Contracting State the obligation: In doing inida plays a critical role in building a better working world for their people, their clients and their communities. Remuneration, other than pension, paid by the Government of ftaa Contracting State to an individual who is a national of that State in respect of services rendered to that State, shall be taxable maugitius in that State.
The provisions of paragraph 1 shall not be construed so as to impose on a Contracting State the obligation—. This Convention shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature dfaa the present Convention in addition to, or in place of, the existing taxes referred to in paragraph 1 of this article.
Directors’ fees and other similar payments derived by a resident of a Contracting Mauritiys in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that mauritous Contracting State.
After a series of high-profile court hearings, the status quo appeared to have been restored. We approve of the mzuritius in the decisions which we have noticed.
The Double Tax Avoidance Agreement between India and Mauritius
The provisions of paragraph 1 shall not apply to income, other than income from mauriitus property as defined in paragraph 2 of Article 6, if the recipient of such income being muaritius resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base.
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