Thursday, August 11, 2011

Tax gateways to India

More good stuff from Reuters:
The equatorial island nations of Mauritius and Singapore are competing for the role of preferred gateway for foreign investments into India and other Asian countries.

Think of it as a triangle, not of love, but of lucre.
and then, of course, as we've repeatedly pointed out:
"Just as tax laws can be drafted to fashion loopholes, so too can tax treaties. One of the biggest loopholes involves what is commonly known as “black money” and a circular movement of capital known as “round tripping.”
And there's an interesting statistic in there:
"Since the turn of the millennium about US$55 billion has come via shell companies set up in Mauritius. This is more than 40 percent of the direct foreign investment in India. Tax authorities in New Delhi believe a lot of that investment was black money from India making a roundtrip to Mauritius. Overall the Indian Finance Ministry estimates faux foreign direct investments from Mauritius are costing it $600 million in taxes annually."
We can't do more now than suggest reading the post.


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