Mauritius for removing DTAA hiccups

New Delhi, Aug 29 | Updated: Aug 30 2006, 05:30am hrs
Short of saying that it will not renegotiate the Double Taxation Awardence Treaty (DTAA) with India, Mauritius on Tuesday said that there was a need for a balanced approach as the agreement has benefited both the countries since it was framed in 1983. But, Mauritius is willing to address any loopholes in the agreement that are being misused, including the issue of "treaty shopping" by shell companies, Mauritius deputy prime minister and finance minister Rama Sithanen told reporters here.

The treaty has been periodically fine-tuned to prevent its misuse and it will continue in the future as well and the two countries have been in dialogue in this regard since 1993 after the opening of the two economies. Many of the glitches in the treaty have been addressed since it came into being, he said.

Sithanen also said the two countries have been working toward a comprehensive economic cooperation and preferential agreement (CECPA), which is expected to be concluded by the year-end.

"We are in the process of dialogue with Indian authorities and there are some points on the table which we need to address," Sithanen said without giving details.Sithanen said the problem of "round tripping" (Indian companies going to Mauritius and again investing in India) has been completely addressed.

On many MNCs taking Mauritius route to enter the Indian market, he said his government has signed an agreement with India for exchange of information. "The purpose of having a double taxation agreement is in the interest of both parties," he said, adding that it has been a continuous process to adopt, modernise and address some of the emerging issues and it has to continue.

"We need to strike a balance," he said, adding that India has many such treaties with other countries but still it has been an attractive destination for investors due to a pool of talented people and international standard norms and regulations."Mauritius has cooperated and will continue to cooperate with India whenever there is alleged misuse of the treaty," Sithanen said. He said queries have been raised by India since 1993-94 and they have been addressed by the Mauritius.

Mauritus is used as a platform for investment in Asia, Africa and other parts of the world as "we have created a global business centre that adds substance," he said.The systems that have been created distinguish Mauritius from other international financial jurisdictions, he said. Rigorous norms, rules and regulations have been strictly adhered to, Sithanen said. He also favoured a level playing field as far as DTAA is concerned as India has such agreements with over 30 countries, out of which 17 countries have no capital gains tax.