The Mauritius government signed, on 29 October, an amending protocol to its 2011 income tax treaty with Germany to bring it into line with recommendations of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project.
The BEPS actions are designed to equip governments with domestic and international rules and instruments to address tax avoidance, ensuring that profits are taxed where economic activities generating the profits are performed and where value is created.
The amending protocol incorporates: a statement in the preamble to emphasise the elimination of double taxation without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance; an arbitration recourse where a tax dispute cannot be resolved by the competent authorities within a period of three years after consideration; and provisions to clarify the cases which are not eligible for arbitration.
The protocol is the first to amend the treaty and must be ratified before entering into force. Mauritius has concluded 44 tax treaties and is party to a series of treaties under negotiation.