Mauritius, considered a tax haven for Global Inc, accounted for 43 percent of cumulative foreign fund inflow into India, even as money parked overseas for tax
avoidance has become an issue in the Lok Sabha polls.
Of the total $81 billion FDI that has come into India since April 2000, $35.18 billion was routed through the Mauritius route, according to figures available with the Department of Industrial Policy and Promotion.
The Organisation of Economic Cooperation and Development (OECD) which has drawn a global list of tax havens, has not included Mauritius among the preferred jurisdictions of the tax get-aways.
However, the tiny nation in the Indian Ocean, which levies effective corporate tax of less than three percent, is considered the best place for avoiding taxes.
Though India has a Double Taxation Avoidance Agreement with about 65 countries like
the US, UK, Japan, France, and Germany, it is Mauritius which is the most preferred
route for FDI inflows.
Even though India offers several exemptions and relief’s to companies on the corporation tax of 30 percent, the effective rate in the country for the corporate is not less than 20 percent.