As per a media report, the Government of India is proposing to
amend the existing Double Taxation Avoidance Agreement between
India and Mauritius ("DTAA"). According
to this media report, the amendment is proposed to avoid the misuse
of the benefits of the DTAA by shell and conduit companies who have
no or minimal operations in Mauritius. The media report on
renegotiation comes across as a stark contradiction to the Finance
Minister's clarification on May 23, 2006, stating that there
were no talks about renegotiation of the DTAA.
As per the media report, the proposal is that the treaty benefit
and in particular exemption from capital gains tax in India will
only be available to those Mauritius companies which satisfy the
following conditions:
