The DTAA which will give a further spur to the positive evolution of economic ties between the two countries will provide greater tax certainty for businessmen while making clear the taxing rights of Mauritius and Bangladesh on all forms of income arising from cross-border economic activities between the two countries. It will also give a boost to cross-border investment by protecting investors from direct or indirect double taxation and enhance the commercial and economic relations between the two countries and broaden investment opportunities for the business community.
Salient features of the DTAA are namely; interest and royalties have been exempted in the country of source; as regards dividends it may be taxed in the country of source at the rate of 10 percent. A Protocol has, however, been included in the Agreement providing that a lower rate than that of 10 percent would apply if Bangladesh, agrees to such lower rate in any other treaty with a third country in the future; capital gains follow the OECD Model, that is each country retains taxing rights on capital gains that may be derived by sale of shares and securities; and Double taxation will be eliminated in both countries through the credit mechanism together with a “tax sparring clause” to provide for additional incentives to investors.
It will be recalled that trade between Bangladesh and Mauritius has been growing at an encouragingly fast pace. Over the period 2004 to 2008 imports from Bangladesh have increased by more than ten-fold and exports have more than doubled. The main items exported are manufactured goods and Mauritius imports mostly cotton yarn, woven fabrics and pharmaceuticals. In the near future, the two countries are also looking forward to concluding an Investment Promotion and Protection Agreement.
In recent years economic interactions between the two nations have also evolved beyond trade. There are presently some 6,000 Bangladeshi workers employed in the following different sectors of the Mauritian economy: agriculture, construction, health, tourism, ICT and manufacturing.