Double Tax Avoidance Agreement India Mauritius

The petitioner argued that the transaction was not on its face, which was made to avoid tax. It is not the structure of the holding company, but this specific transaction that defines the intention to avoid taxes or not, which the authorities have not demonstrated. In addition, it was suggested that all decisions and board meetings were made on behalf of the Mauritian company and its directors. In addition, it was argued that limited access to the company`s bank accounts did not show that Mauritius` board did not have financial control over the company. India has concluded comprehensive agreements to avoid double taxation (DBAA) with 88 countries. [4] This means that there are agreed tax rates and skill rates for certain types of income generated in one country for a country of taxation established in another country. Under India`s Income Tax Act of 1961, there are two provisions, Section 90 and Section 91, that provide taxpayers with special facilities to protect them from double taxation. Section 90 applies to tax payers who have paid tax to a country with which India has signed a DBAA, while Section 91 provides relief to taxpayers who have paid taxes in a country with which India has not signed DBAA. Thus, India relieves both taxpayers. Send your article via our online form Click here Note we only accept original articles, we do not accept articles that have already been published on other websites. For more details Contact: editor@legalserviceindia.com In the current situation where there is economic instability in the market, this is a major setback for investors, where each country seeks to create the friendly market for investment and decisions as AAR will remove investors from the country.

First, the effects of such an order are expected to be colossal. Investors were protected under the grandfather`s general rule, i.e. investments before April 1, 2017, will not be taxable, but after changing the rules of the agreement between the Government of the Republic of India and the Government of Mauritius to avoid double taxation, exit plans have been strengthened2. The impact would also be visible in the process, as there is considerable uncertainty about the resignations of private equity firms and the DBAA signed by India with Mauritius. This is not the first time AAR has ruled against the normal course of the contract. On a few occasions, it has been found that investors and companies derive their money from Mauritius and Singapore, primarily to take advantage of DTAA`s advantage between India and Mauritius. It`s a bit mysterious, because India also renegotiated its double tax evasion deal with Singapore in 2016 to fill exactly the same loopholes as Mauritius, which was a capital gains-based tax on the sale of shares.

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