Mauritius's New Tax Info Exchange Agreement with India is ready

The African island nation, Mauritius's new Tax Information Exchange Agreement (TIEA) with India has been negotiated and is ready to be signed. Mauritius Finance Secretary, Ali Mansoor, told that the pact would help the two countries exchange information on tax matters of the entities doing business in the two countries.

Meanwhile, the two countries are working on a new DTAA (Double Taxation Avoidance Agreement) and progress has been made on various fronts.

The concerns have been raised in recent years that the island nation is being used for money laundering and round tripping of illicit funds. The Mauritius based entities came to light in some cases of corruption and alleged tax evasion, which were suspected to have been set up by Indian entities to dodge the tax authorities in India.

To address India's concerns Mauritius has setup a joint working group for revision of DTAA and took number of steps within and outside the provisions of pact.

Indian auditors have been allowed to come and check the books of entities operating from Mauritius. A pact has been signed between market regulators of two countries, Sebi and Financial Services Commission (FSC).

Mauritius has agreed to review on a regular basis the Tax Residency Certificates issued by it to the companies investing in India and talks are on to make DTAA mutually beneficial for both the countries. 

Mansoor said that Mauritius is committed to follow all international standards on such information exchange frameworks. Many countries are exploring bilateral exchange of information treaties as well and Mauritius is in talks on many such pacts including on FATCA (Foreign Account Tax Compliance Act) with the US.

Talks on Limitation on Benefits clause are going on, which might require Mauritius to collect some amount of tax from entities that fail to meet certain investment commitments in India within a certain period of time. 

Tackling the issue of money laundering has become very important for authorities across the world and a proper exchange of information between countries is the key element in addressing them.