Monday, June 20, 2011


- Capital gains is exempted from tax in Mauritius - a Mauritian company cannot be taxed in India. That is why, Mauritius is a tax-haven for foreign funds investing in India.

- The two countries had first started negotiations on revising the Double Taxation Avoidance Agreement (DTAA) in 2006, a joint working group was set up, but the talks were stalled in 2008 as Mauritius was not ready to allow India to tax capital gains at source.
- India wants DTAA with Mauritius at par with that of Singapore. The new proposal states that only companies listed on a recognised stock exchange be eligible for capital gains tax exemption under the treaty. The company should have a total expenditure of $200,000 or more on operations in Mauritius for at least two years prior to the date on which a capital gain arises.
- Cayman Islands is the other such similar tax haven. If 40% FDI comes from Mauritius, around 27% comes from Cayman.


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