New Delhi: India is planning amendments to
the Double Taxation Avoidance treaty with Mauritius to prevent
its misuse for avoiding taxes.
"Amendments to the Indo-Mauritius DTAC (Double taxation
Avoidance Convention) to prevent its misuse and enhance
exchange of information, including banking information, are
being pursued...," Minister of State for Finance S S
Palanimanickam said in a written reply in the Rajya Sabha
During the period between 2006-07 and 2008-09, foreign
direct investment (FDI) from Mauritius is estimated at Rs
1,24,141 crore, the Minister said.
FDI from Bermuda, another tax haven, has been to the tune
of Rs 1,998 crore. There is, however, no tax treaty between
India and Bermuda.
The changes in the treaty are being worked upon through
a joint working group constituted for this purpose, he added.
Many companies route their investments into India through
tax havens to avoid paying taxes.
The Organisation for Economic Cooperation and Development
(OECD) has said that all countries should permit access to
bank information for all tax purposes so that tax authorities
can fully discharge their revenue raising responsibilities,
the Minister said.
To a query that if the US is taking initiatives to enact
a legislation that will prevent American firms from using
offshore tax havens and if it would impact investments into
India, the Minister said, "It is not possible to assess
whether European and American initiatives targeting tax havens
will have any impact on investments flow to India."