No complaints on round-tripping money from India: Mauritius

Last Updated: Tuesday, January 19, 2010 - 19:19

New Delhi: Dismissing the notion that
Mauritius is a tax haven, the island nation`s Vice-Prime
Minister Ramakrishna Sithanen today said he has not received
any complaints from India about routing investments via his
country to evade taxes.

However, Sithanen, who is also the Finance and Economic
Development Minister, promised to cooperate with Indian
authorities to check tax evasion in case of complaints, but
added his country would not welcome "fishing expeditions."

"Mauritius is not a tax haven...We have not received
a single complaint of round tripping from competent
authorities (in India)," he said while talking to reporters on
the sidelines of an investors conference.

Round-tripping is usually referred to routing of domestic
investments through Mauritius to take advantage of the Double
Tax Avoidance Agreement (DTAA) to pay lower taxes on profits.

India has reportedly found many cases of misuse of the
Double Taxation Avoidance Treaty with Mauritius and is working
on revising the treaty with the country to prevent its abuse
by companies, domestic or foreign.

In April-October 2009-10, India received about USD 18
billion in FDI and nearly half of it--around 8 billion--came
from Mauritius.

The Indian government has said earlier that amendments to
the Indo-Mauritius tax treaty is being pursued to prevent its
misuse and have more exchange of information, including bank
details.

Mauritius` Finance Minister assured the country has
always provided information whenever there was a request from
India.

"We continue to strengthen the effectiveness of our
exchange of information mechanism ... plus we take sanction if
we have evidence that there has been abuse," Sithanen said.

He further said if any company is found routing its
investments via Mauritius to evade taxes, its permit would be
revoked.

"...if there is any allegation of round tripping and
this is found to be true, that company would be in breach of
the conditions of the permit and it would be revoked," he
added.

The two countries have set up a joint working group to
address their tax-related concerns.

Sithanen is in India mainly to promote investment into
Mauritius and has met Finance Minister Pranab Mukherjee
in this regard.

PTI



First Published: Tuesday, January 19, 2010 - 19:19

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