Naomi Fowler – India and the renegotiation of its double taxation agreement with Mauritius: an update Reduced withholding rates apply only if the recipient of the income is the beneficiary of the income. Expenses, including general administrative and supervisory expenses, borne by the EP inside or outside the country in which it is located, are deductible for the calculation of PE`s taxable profit. This raises another question: where are they cooked? Some of them may have gone to Singapore. Inflows from Singapore doubled over the same period. In 2017, Singapore was the second largest source of inflows, with a value of 20% for $4.5 billion. A year later, this figure doubled to $8 billion, or 40% of capital inflows from foreign direct investment in 2018. Singapore remains by far the largest source in 2019. On 26 June 2020, following the repeal of the DBA, the Kenyan government created a subsequent DBA between Kenya and Mauritius. The DBA is very similar to the original DBA and provides for reduced withholding rates on dividends, interest and royalties. The DBA also addresses other relevant issues, including the exchange of information between the two countries and the procedures of the reciprocal agreement.

In March 2019, the High Court of Kenya annulled an agreement on the prevention of double taxation (DBA) between Kenya and Mauritius. Here is an EY Tax Insights article with more details on the nullity of the DBA. Under Mauritian national law, no withholding tax applies to interest paid to a non-resident who does not operate in Mauritius (a) from a Financial Services Act (FSA) company on his foreign source income; (b) by a bank holding a banking licence under the Banking Act, to the extent that interest is paid on the gross income of its banking operations with non-residents and companies holding a GBL under the FSA. Interest collected is also tax-exempt in a number of other cases, such as. B the interest rate for a non-resident person of a Mauritanian bank and interest on bonds and sukuks listed on the stock market of a non-resident company. The DBA applies to direct taxes managed under the Income Tax Act, Cape 470 of Kenyan laws. It includes corporation tax, withholding tax, payroll payment (PAYE) and capital gains tax (CGT). Mauritius does not have a CGT scheme, so the DBA only covers income tax, including corporate social responsibility. After renegotiating its agreement on double tax evasion with Mauritius in 2016, India has seen some positive developments.