India takes back tax power, rewrites treaties with Mauritius, Singapore & Cyprus
India has renegotiated tax treaties with Mauritius, Singapore, and Cyprus to reclaim the right to tax capital gains at the source. These amendments aim to strengthen the national tax base and prevent the misuse of treaty provisions for tax avoidance.
Why it matters
This shift significantly impacts foreign investment structures into India and reflects a broader global trend of tightening international tax regulations.
Finance minister Nirmala Sitharaman on Wednesday said India has renegotiated its tax treaties with Mauritius, Singapore and Cyprus to restore the country’s right to tax capital gains arising from investments in India at the source.Speaking about India's tax policy and international taxation framework, Sitharaman said the changes were part of wider efforts to strengthen the country’s tax base and prevent the misuse of treaty provisions.Under the earlier arrangements, investors based in some jurisdictions, particularly Mauritius, could in certain circumstances claim that capital gains from the sale of shares in Indian companies were taxable only in their country of residence.
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