Both agreements are consistent with the policy of negotiating tax agreements in Argentina and relevant international standards. Shortly after we began searching hundreds of thousands of files sent anonymously from the island state of Mauritius, we wondered: what are all these “double taxation agreements” or “tax treaties” that we see all the time? Right now, the World Bank and the IMF are much more skeptical because they have seen the evidence. The OECD now promotes a set of international agreements and initiatives, of which tax treaties are only a part. Double taxation agreements (DBAs) are contracts between two or more countries to avoid international double taxation between income and wealth. The main objective of the DBA is to distribute the right of taxation among the contracting countries, to avoid differences, to guarantee equal rights and security of taxpayers and to prevent tax evasion. However, this initial reason for wanting to avoid double taxation has not completely disappeared, as there will always be some differences in the way countries manage profits. The agreement on the prevention of double taxation between India and Singapore currently provides for a tax based on the residence of the capital gains of a company`s shares. The third protocol amends the agreement effective April 1, 2017, which provides for a tax at the source of capital gains from the transfer of shares of a company. This will reduce revenue losses, avoid double non-taxation and streamline investment flows. In order to ensure the safety of investors, equity investments made before April 1, 2017 were processed in accordance with the benefit limitation clause provided by the 2005 Protocol, in accordance with the terms of the benefit limitation clause. In addition, a two-year transitional period was provided between April 1, 2017 and March 31, 2019, during which capital gains on shares in the source country are taxed at half the normal rate, subject to compliance with the terms of the benefit limitation clause.
Double taxation is the collection of taxes by two or more jurisdictions on the same income (in the case of income taxes), assets (in case of capital taxes) or financial transactions (in the case of revenue taxes). Tax evasion, on the other hand, exploits the way the law is drafted. For example, a tax treaty can be used to obtain an advantage that was not the original intent of the treaty. The tax authority is not in a position to do anything about this in the immediate time frame, as the taxpayer is legally authorized. In the longer term, you need to change the law. You have to change the tax treaty, which is difficult to do because you need both parties to approve it. Mauritius is the linchpin of many tax evasion schemes in Africa. There are other jurisdictions, such as the Netherlands, but Mauritius is really at the top of the list.
And the position in Mauritius is really due to its tax treaties. Tax treaties really came up about 100 years ago, when the economy started to become more international.