The tax treaty between India and Mauritius was signed in in keeping with India’s strategic interests in the Indian Ocean and India’s close cultural links with . not taxable in India under the provisions of the Double Taxation Avoidance Agreement (tax treaty) between India and Mauritius. In detail. Facts. The country that is next in line is Singapore with a FDI inflow to India in the same period amounting to INR , crores. While Mauritius accounts for 34% of.
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Further, where such resident is a company by jauritius surtax is payable in India, the credit aforesaid shall be allowed in the first instance against income-tax payable by the company in India and as to the balance, if any, against surtax payable by it in India. 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.
Nothing contained in this Article shall be dtxa as obliging a Contracting State to grant persons not resident in that State any personal allowances, reliefs, reductions and deductions for taxation purposes which are by law available only to persons who are so resident.
The term “dividends” as used in this Article means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is maritius to the same taxation treatment as income from shares by the laws of the Contracting State of which the company making the distribution is a resident.
Penalty charges for late payment shall not be regarded as interest for the purpose of this article. The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. Notwithstanding the provisions of articles 14 and 15, income derived by public befween such as theatre, motion picture, radio or television artistes and musicians, and by athletes, from their personal activities as such may be taxed in the Contracting State in which these activities are exercised.
The term “royalties” as snd in this Article means payments of any kind received as a data 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.
Dividends paid beteeen a company which is a resident of a Contracting State to a resident of the other Contracting State xtaa be taxed in that other State.
The Double Tax Avoidance Agreement between India and Mauritius
Article 13 of the Convention deals with taxation of capital gains and it has five paragraphs. What does the Protocol say? The exchange of information is not restricted by Articles 1 and 2.
If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly by one or more residents of the other Contracting State, shall not be subjected in the first mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdens than the taxation and connected requirements to which other similar enterprises of that first mentioned State are or may be subjected in the same circumstances.
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 adequate and full consideration in money or money’s worth.
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.
Each of the Contracting State shall notify to the other completion of the procedures required by its law for the bringing into force of this Convention.
Further, where such resident is a company by which surtax is payable in India, the credit aforesaid shall be allowed in the first instance against income-tax payable by the company in India and as to the balance, if any, against surtax payable by it in India. 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. Interest arising in a Contracting State shall be exempt from tax in that State provided it is derived and beneficially owned by: The term ‘ dividends indai as used in this Article means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the Contracting State of which the company making the distribution is a resident.
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. 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 income is derived from personal activities exercised by an entertainer or an athlete in his capacity as such, and bftween not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of articles 7, 14 and andd, be taxed in the State in which the activities of the entertainer or athlete are exercised.
For the purpose of this Article, the term ” Government ” shall include any State Government or local or statutory authority of either Contracting State and, btween particular, the Reserve Bank of India and the Bank of Mauritius. In no case shall the provisions of this Article be construed so as to impose on a Contracting State the obligation: For Further Details Contact: However, the tax charged shall not exceed the rate of the Mauritius tax on profit of the company paying the dividends.
The provisions of Article 1, 2, 3, 5 and 8 of the Protocol shall have effect:. Paragraph 4 deals with taxation of capital gains arising from the alienation of any property other than those mentioned in the preceding paragraphs and gives the right of taxation of capital gains only to that State of which the person deriving the capital gains is a resident.
The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities in the same circumstances.
India-Mauritius DTAA Revised
The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein or performs in that other State independent personal services from a fixed base situated therein beteen the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base.
Where, however, the person paying the fees for technical services, whether he is a resident of a Contracting State betwewn 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.
The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein.
Copyright Registration ph no: Soon enough, the Indian tax officers did not appreciate the prospect of perceived dtas box companies in Mauritius claiming the tax exemptions and sent tax bills to them, alleging misuse of treaty.
The term ‘ permanent establishment ‘ shall include: The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. From Wikipedia, the free encyclopedia. The Convention shall remain in force indefinitely but either of the Contracting States may, muaritius or before the thirtieth day of June in any calendar year beginning after the expiration of a period of five years from the date of its entry into force, give the other Contracting State through diplomatic channels, written notice of termination and in such event, this convention shall cease to have effect: Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected in the same circumstances.
Interest arising in a Contracting State shall be exempt from tax in that State provided it is derived and beneficially owned by:.
India-Mauritius tax treaty: An end and a new beginning | Forbes India Blog
The provisions of paragraphs 1 and 2 of this article shall not apply to remuneration and pensions in respect of services rendered in connection with any business carried on by the Government of either of the Contracting States for the purpose of profit. Notwithstanding the provisions of paragraph 2dividends paid by a company which is a resident of Mauritius to a resident of India may be taxed in Mauritius ajd according to the laws of Mauritius, as long as dividends paid by companies which are residents of Mauritius are allowed as deductible expenses for determining their taxable profits.
The second and third paragraphs deal with right of ddtaa of capital gains on the alienation of movable property linked with business or professional enterprises and ships and aircrafts. Therefore, any resident of Mauritius deriving income from alienation of shares of Indian companies will be liable to capital gains tax only in Mauritius as per Mauritius tax law and will not have any capital gains tax liability in India.
The term ” operation of ships or aircraft ” shall mean business of transportation znd persons, mail, livestock or goods, carried on by the owners or lesses 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 this regard, the Mutual Assistance in Criminal and Related Matters Act and the Financial Intelligence and Anti-Money Laundering Act which provides a framework for exchange of information on money laundering with members of international financial intelligence groups are cases in point. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States.