India, Mauritius signs Protocol to Amend Taxation Methods
India and Mauritius have signed a protocol to amend taxation methods for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains.
The Protocol seeks to prevent “abuse” of the tax avoidance treaty. It also provides for updation of Exchange of Information Article as per international standard, source-based taxation of other income, provision for assistance in collection of taxes, amongst other changes.
- The Protocol will help to tackle the long pending issues of treaty abuse and round tripping of funds attributed to the India-Mauritius treaty.
- It will also help to curb revenue loss, prevent double non-taxation, streamline the flow of investment and stimulate the flow of exchange of information between India and Mauritius.
- It will ensure that firms based Mauritius that invest in India are not just ‘shell’ companies who could earlier avoid paying capital gains tax in India.
Month: Current Affairs - May, 2016