Mauritius and Monaco Sign Double Taxation Avoidance Convention

Mauritius and the Principality of Monaco signed during the weekend a Double Taxation Avoidance Convention (DTAC), following fruitful negotiations between the two countries towards the conclusion of the DTAC in March 2012.

The Signatories were the Vice-Prime Minister, Minister of Finance and Economic Development, Mr Xavier-Luc Duval, on behalf of the Mauritian Government and the Minister of Foreign Affairs of Monaco, Mr. José Badia.

With the coming into operation of the DTAC, both countries will reap mutual benefits in terms of an in-flow of foreign investments which is considered to be one of the main engines of economic growth by generating trade activities, transfer of technology, promote the management skills of entrepreneurs and create employment opportunities. The DTAC will serve as a powerful inducement for entrepreneurs of both countries to explore the possibilities for mutually profitable ventures.

Under this Convention, double taxation which is an impediment to cross-border activities will be eliminated. It also provides for reduced taxation at source or exemption on various sources of income which is an added incentive for an increase in cross-border activities.

Another advantage for Mauritius to enter a DTAC with Monaco is the avoidance of double taxation for investors investing in Mauritius from Monaco or vice versa and will also prevent fiscal evasion with mutual respect to taxes on income and capital gains by encouraging mutual trade and investment.

Moreover, the DTAC will provide significant advantages to companies investing either in Mauritius or in Monaco, in terms of capital gains, royalties, interest, dividends, income or profit.  In this respect, the tax burden will be reduced significantly and the investors will avoid being taxed twice on the same income or profit.

Besides, the DTAC will guide investors of the tax treatment they may receive either in Mauritius or in Monaco. The Convention also provides for an exchange of information mechanism.

So far Mauritius has signed Double Tax Avoidance Agreements with 42 countries.