Chennai: India’s amendment of Double Taxation Avoidance Agreement (DTAA) with Mauritius has had little effect on the reported purpose of arresting tax evasion and tax abuse. The inward investments from Mauritius have been growing in the past two years, despite the amendment being partially in force.
India had amended DTAAs with Mauritius and Singapore in 2016, levying capital gains tax on investments routed through these countries. The taxes on capital gains were applicable to investments made from April 1, 2017 at 50 per cent of the domestic rate until March 31, 2019 and at the full rate from April 1, 2019.
However, the amendment has not been able to bring down the investments from the island nation. As per data from the Economic Development Board of Mauritius, in 2016, total outward investments made by the country in India amounted $15.1 billion. In 2017, since the amendment came into force partially, the same grew to $16.2 billion. Further, for the next six months, till June 2018, investments in stock through Mauritius to India grew multi-fold to $216 billion.
“There has been a positive growth subsequent to the amendment of the treaty in terms of total investments from Mauritius to India. This also signifies that investors look beyond fiscal advantages to invest in India. There are a multitude of compelling reasons investors use Mauritius as their investment destination of choice,” said a spokesperson for the Economic Development Board.
