The ongoing wrangle between New Delhi and Port Louis on the amendments to be made to the agreement of double taxation on offshore operations discussed a new turn in early this year and on the eve a new round of consultations on the latter treaty. To believe the business press in India, India submits to blackmail Maurice politico-diplomatic not signed the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) without the efforts of Mauritius to settle the dispute over the imposition of Capital Gains Tax on offshore operations.
This message was sent so that diplomatic law at the Government House through the Minister of Commerce of India, Anand Sharma, who was on an official visit to Mauritius early this year. To date, India and Mauritius have jointly participated in ten rounds of negotiations on the chapters with CEPCA services (offshore), trade and investment still pending.
newspaper The Business Standard of India revealed in its edition today that Foreign Minister Arvin Boolell, made a strong plea to the Indian party to the effect that these two treaties must be negotiated independently of one another and can not be no question of linking the signing of the partnership agreement and cooperation Indo-Mauritian economic decisions on the Double Taxation Avoidance Treaty.
"however, Mauritius has-been insisting on Separating the two issues - liberalization of trade through the comprehensive economic cooperation and partnership agreement, and revision in DTAA. Mauritius is keen to act to aussi Itself position as a preferred route for channeling outward FDI to Africa Indian. At a meeting in New Delhi recently, Arvin Boolell, Mauritius' minister for Foreign affairs, regional integration and international trade, Had urged Commerce Minister Anand Sharma to separate talks on the revision CECPA and DTAA, "reports Business Standard.
The newspaper also reported the suspension of negotiations between New Delhi and Port Louis on the final details of the CECPA. Indo-Mauritian dispute focuses on the interpretation of the Capital Gains Tax and the definition of "Enterprise" and the treatment to be accorded to the "Shell Companies". This decision was motivated by the Department of Revenue (the Income Tax of India), who argues that "the conclusions of the trade deal Would entail monetary concessions to Mauritius, Impacting the talks of Modifying DTAA. Also, the definition of enterprise and treatment to shell companies cannot be different in DTAA and CECPA. So it has-beens Decided the trade deal, Mauritius Which is extremely eager to sign, will not be till Concluded Mauritius speeds up revisiting the India-Mauritius DTAA. "
In diplomatic circles, political as well as business, the decision of the India to interrupt the process leading to the signing of the partnership agreement and economic cooperation with Mauritius is an additional pressure, not to mention blackmail, to get the government to reconsider its position on Article 13 of the Agreement on avoidance of double taxation, providing exemption from the imposition of Capital Gains Tax on transactions under the Offshore.
The next round of consultations in the Joint Working Group, down to India in February may be extremely important in the future configuration of relations and economic cooperation between India and Mauritius. We should expect to see increased trade and diplomatic policy level to "tone down" the dispute with the backdrop of abuse recorded in the Treaty of double taxation.
's Business Standard said that "the revision of India-Mauritius DTAA is a long-pending issue entre le two countries. Article 13 on "capital gains" of the India-Mauritius DTAA Provides for taxation of capital gains only in the country of residence of the investor. The Indian side Proposed to amend the treaty to Provide the source-based taxation of capital gains Such (in this case India) to plug the misuse of the treaty by shell companies Formed by third countries' corporate entities. "