Mauritius to revise tax treaty

Mauritius has agreed to negotiate and revise the existing Double Taxation Avoidance Agreement (DTAA) with India and the two sides are expected to meet soon to work out the details, Central Board of Direct Taxes (CBDT) chairman Prakash Chandra said on Saturday. India has been seeking to tax capital gains on companies making profit in India. Over 40% of total foreign direct investments to India originate from Mauritius. Authorities here suspect most of these investments are treaty shopping to avoid paying tax. Capital gains is exempted from tax in Mauritius, and under the DTAA, a Mauritian company cannot be taxed in India.