01 July 2015

India and Mauritius reach consensus on Double Taxation Avoidance Agreement

Mauritius and India have reached consensus in the conclusion of the Double Taxation Avoidance Agreement (DTAA) which has been long awaited between the two countries following fruitful discussions yesterday between joint working groups of Mauritius and India.

The positive conclusion of the negotiations will open a new era of cooperation between the two countries that will reap the benefits of a mutual package that would yield a win-win outcome for both parties.

In a statement the Minister of Finance and Economic Development, Mr Vishnu Lutchmeenaraidoo, expressed his gratitude to the Indian Prime Minister, Mr Narendra Modi, for his commitment to ensuring that India will not cause any prejudice to the interests of Mauritius in the negotiations regarding the Treaty. This has contributed enormously to advance discussions in finalising the Treaty, he said.

During his mission in New Delhi, Minister Lutchmeenaraidoo had discussions with his Indian counterpart, Mr. Arun Jaitley, about the DTAA which has eventually triggered negotiations between the technical missions that is the joint working groups.

In the wake of measures announced in the Indian budget in 2012, particularly the introduction of the General Anti-Avoidance Rules (GAAR), it has been deemed necessary for Mauritius to clear any uncertainties arising under the DTAA. Because of the possibility of overriding effects of the GAAR on tax treaties signed by India with other countries, the impact of the measures announced in the budget has raised concern from these countries. There was apprehension that the GAAR provisions and the treaty overriding provision would impact majorly on taxpayers outside India.

So far, the existing DTAA between Mauritius and India has helped Mauritius in the development of its financial services sector and the Treaty has also benefited India in terms of Foreign Direct Investment over the last 20 years.

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