Mauritius to revoke licences of firms who round-trip funds
Mauritius Government on Wednesday said it would revoke the licences of the island-based companies which misuses treaty with India to evade taxes.
Mumbai: Mauritius Government on Wednesday said
it would revoke the licences of the island-based companies
which misuses treaty with India to evade taxes.
Regulators of both countries have agreed to work on
the issue, where companies channel funds through Mauritius to
avoid capital gain tax, Mauritius Vice-Prime Minister
Ramakrishna Sithanen said on the sidelines of a function here.
"There are some concerns raised by India...we have agreed
to look at these concerns as it is not in the interest of
either country to continue to have these issues," he said.
The Mauritius Government has not received any complaints
from India regarding firms routing money through his country
to evade taxes, he said.
The Minister said Mauritius has `done the maximum` to
make the island nation`s tax environment friendly for
investors to set up business there.
Mauritius Financial Services Commission (FSC) will watch
the operations of companies based in that country and has the
power to revoke licences of those firms who round-trip money,
Despite the conducive investment climate in Mauritius,
new businesses entering the country located in the Indian
Ocean will have to ensure the availability of land, given the
constraints in this regard, the Minister said.
At present, Mauritius is a major centre for sectors
such as pharma, medical devices, biotechnology, healthcare
and medical travel.
India and Mauritius signed the Double Taxation Avoidance
Treaty (DTAT) for the first time in 1983.
The main provision of the controversial pact was that
no resident of Mauritius would be taxed in India on capital
gains arising out of sale of securities in India.
The treaty gives capital gains exemption for investments
if routed via Mauritius. The DTAT has undergone several
modifications over the years.