Mauritian PM promises meaningful talks on new tax treaty

Amid talks with the government here to review the bilateral taxation treaty, the government of Mauritius said on Friday it would "walk the extra mile" to meet Indian concerns.

"We will put in all the necessary efforts...to ensure our reputation as a clean, proven and trusted jurisdiction is upheld at all costs," said its prime minister, Anerood Jugnauth.

He was speaking at the opening here of a Board of Investment Office, his government's investment promotion agency.

India has concerns that Mauritius, one of the top sources of foreign direct investment into this country, is being used for round-tripping of funds. Round-tripping involves getting money out of one country, say India, sending it to a place like Mauritius and, then, dressed to look like foreign capital, sending it back home to earn tax-favoured profits. The problem for the home country is that native profits escape taxation this way. The two countries are renegotiating their existing Double Taxation Avoidance Agreement (DTAA); The Indian government wants the new treaty's provision to effectively check round-tripping. A host of global companies have been using the island nation to route their investments to India, to benefit from the DTAA provisions, in force since 1983.

Jugnauth, ahead of a meeting with Indian counterpart Narendra Modi, said he was "looking forward to a friendly and positive discussion on the DTAA".

Mauritius, he added, was widely known as a financial centre of choice and excellence, and adhered to international "best practices norms". Earlier this year, Mauritius became a signatory to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. This is aimed at more exchange of tax information among governments, to help curb the flow of unaccounted money and assets.