India and Mauritius signed Protocol to Amend Taxation Methods
Posted on:11 May 2016 14:30:44
Free Current Affairs to Your Email
11 May 2016 Current Affairs: India and Mauritius on 10 May 2016 signed a protocol on taxation at Port Louis, Mauritius. The protocol provides for amending the convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains
The Protocol also provides for updation of Exchange of Information Article as per international standard, provision for assistance in collection of taxes, source-based taxation of other income, amongst other changes.
Features of the Treaty/Protocol : With this Protocol, India gets taxation rights on capital gains. They arise from alienation of shares acquired on or after 1 April 2017 in a company resident in India with effect from financial year 2017-18. Taxation in India at full domestic tax rate will take place from financial year 2019-20 onwards.The benefit of 50 percent reduction in tax rate during the transition period from 1 April 2017 to 31 March 2019 shall be subject to LOB Article. Interest arising in India to Mauritian resident banks will be subject to withholding tax in India at the rate of 7.5 percent in respect of debt claims or loans made after 31 March 2017.Under the amended treaty, only those Mauritius-based companies that have a total expenditure of more than 27 lakh rupees in the preceding 12 months will be able to benefit from the tax treaty.
Significance of the Protocol : The Protocol will tackle the long pending issues of treaty abuse and round tripping of funds attributed to the India-Mauritius treaty. It will curb the revenue loss, prevent double non-taxation, streamline the flow of investment and stimulate the flow of exchange of information between the two countries. It will improve transparency in tax matters and will help curb tax evasion and tax avoidance.Simultaneously, existing investments, that is investments made before 1 April 2017 have been grand-fathered and will not be subject to capital gains taxation in India.
FreshersLive - No.1 Job site in India. Here you can find latest 2018 government as well as private job recruitment notifications for different posts vacancies in India. Get top company jobs for both fresher and experienced. Job Seekers can get useful interview tips, resume services & interview Question and answer. Practice online test free which is helpful for interview preparation. Register with us to get latest employment news/rojgar samachar notifications. Also get latest free govt and other sarkari naukri job alerts daily through E-mail.