MAURITIUS REJECTS COMPENSATION TO PLUG DOUBLE TAXATION LOOPHOLES

Despite an offer to monetarily compensate Mauritius for losses as a result of tightening tax norms, India has given up hope for the time being of amending the 26-year double taxation avoidance agreement with the tiny Indian Ocean tax heaven off the Southeast coast of Africa. Mauritius accounts for nearly half of all Foreign direct investments (FDI) inflows to India. A key change to the treaty being pushed by India is to move from a “residence based system of taxation” to a ‘source based” system, meaning investor from Mauritius would need more than a proforma registered office in the island to qualify for a tax breaks