New tax avoidance treaty with India: Mauritius

Mauritius on Wednesday expressed the hope that the Double Taxation Avoidance Agreement (DTAA), which is at the centre of a long-standing controversy over routing of foreign investment into India, will be "behind us" when a new treaty is signed between the two countries.

"We have the cleanest system. There is no misuse of the treaty. The DTAA will be behind us when we will sign a new treaty (after the JWG meet in New Delhi in coming April)," Mauritius Prime Minister Navinchandra Ramgoolam told reporters accompanying Indian President Pranab Mukherjee on a three-day state visit to the island nation.

Mauritius has often been accused of being used as a conduit for routing of untaxed funds to and from India. A revised treaty between the two countries is in works to address these concerns.

During his meeting with Indian President yesterday, Mr Ramgoolam had said that he had discussed the issue of DTAA with him during delegation level talks and both the countries hope to reach a solution soon.

"We spoke about the Double Taxation Avoidance Agreement. We have already found some common ground to find a solution. This is going to come to an end in April," he had said in the presence of President Mukherjee after attending a ceremony where several pacts on health, medicine, tourism were signed.

Mauritius had also agreed with India on a Tax Information Exchange Agreement (TIEA), which incorporates provisions on assistance in the collection of taxes. 

Mr Mukherjee had said that India looked forward to the meeting of the Joint Working Group to be held in April in New Delhi.

"I am pleased to note that the Joint Working Group on the Double Taxation Avoidance Convention (DTAC) has met twice in the last one year. They have provided an opportunity for both sides to discuss all issues with the aim of finding a mutually acceptable and beneficial outcome," Mr Mukherjee had said.