Mauritius to revoke licences of firms who round-trip funds
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Last Updated: Thursday, January 21, 2010, 00:17
  
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, Sithanen stated.

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.

PTI


First Published: Thursday, January 21, 2010, 00:17


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