7 Things to know about India-Mauritius Tax Treaty Amendment

By Kotak Securities:

7 Things to know about India-Mauritius tax treaty amendment from Kotak Securities

Here are some important points to keep in mind about India-Mauritius Tax Treaty Amendment.

1. 7 Things to know about India-Mauritius tax treaty amendment


2. India will levy capital gains tax on investments routed through Mauritius from April 1 2017.


3. Capital gains tax will be imposed at 50% or half of the domestic rate until March 31, 2019 and at the full rate thereafter.


4. Once the new rule gets implemented, overseas investors routing their money through Mauritius and Singapore will pay the same tax rate.


5. The new rules will not apply only to investments made before April 1, 2017


6. These are bilateral treaties signed between governments to prevent companies from double taxation


7. Mauritius, had almost negligible taxes. Hence many companies routed their investments in India through “shell” companies (which existed only on paper) in Mauritius and avoided paying taxes.


8. India has seen the largest FDI inflows from Mauritius, which accrues to 34% of total FDI in India between 2000 and 2015.

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