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Vol 3 (AAC) No 8

Published 1st June 2010


Mauritius

Taxing times

Port Louis suspends six forex companies as talks resume on the tax treaty that allows Indian companies to launder illicit funds

India’s Finance Minister Pranab Mukherjee is sending a team of senior officials to resume the difficult negotiations with Mauritius to resolve the lingering stand-off over the 1983 Double Tax Avoidance Agreement. Under the DTAA, capital gains on shares in Indian companies bought in Mauritius are not liable for tax. That has encouraged a massive flow of illicit funds from India to Mauritius, which is then re-invested in India – with no tax paid on the profits.

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