08 november 2006

government asks sebi, rbi to prepare negative list of tax havens
mumbai: the government will ask the reserve bank of india (rbi) and stock market regulator sebi to prepare a negative list of tax havens, especially in the mauritius, to check the misuse of tax treaties.

this follows recommendation of the lahiri committee on ways of preventing entities registered in these countries from attaining the status of foreign institutional investors (fiis).

"rbi and sebi are being asked to prepare the negative list of tax havens," a note issued by the finance ministry said.

mauritius is a tax haven for fiis operating in india. many fiis operating out of mauritius misuse the double taxation avoidance agreement with india to avoid taxes on short-term capital gains as there is no capital gains tax in mauritius.