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By that reasoning, every double taxation treaty that contains some sort of exemption is exploitative. The Mauritian treaty does not contain any abnormal clause
by charlesdm 7y ago
By that reasoning, every double taxation treaty that contains some sort of exemption is exploitative.
The Mauritian treaty does not contain any abnormal clauses that are uncommon in intra EU treaties and for example, most US-EU treaties.
Double taxation treaties are a way to incentivise people to invest in a specific country. Generally both countries exempt (or promise to partially exempt) booked income from the other country so that it does not get taxed twice. It does not exempt them from all taxation whatsoever.
But an example: if as a UK resident you invest in the US and book a capital gain on a shareholding, you won't pay US capital gains tax. That will be exempt. But you will pay capital gains tax in the UK.
- coldtea 7y ago>By that reasoning, every double taxation treaty that contains some sort of exemption is exploitative. If they are treaties with tax havens, places used purposefully for those reasons, then yes, they are.
- JumpCrisscross 7y ago> If they are treaties with tax havens, places used purposefully for those reasons "Tax haven" is an ambiguous term. Double taxation treaties exist so investments aren't taxed twice, once at the origin and again at the destination. The Indian-Mauritian treaty mostly covers capital gains, and in that way is similar to most such treaties. The principal benefit of jurisdictions like Mauritius, the Cayman Islands, Delaware or Singapore is less to reduce taxes than to simplify them. Indian taxes are wonky and volatile. Indian courts are slow and expensive. Going through Mauritius lets an international investor finance projects in India while abstracting away a lot of cruft.
- coldtea 7y ago>The principal benefit of jurisdictions like Mauritius, the Cayman Islands, Delaware or Singapore is less to reduce taxes than to simplify them. Well, I seriously doubt that. Especially when extremely elaborate schemes are used to route taxes to those destinations and "simplify" them...