Botswana Mauritius Double Tax Agreement: What You Need to Know
The double taxation agreement between Botswana and Mauritius is a treaty designed to reduce the tax burden on residents of both countries who engage in economic activity across borders. The agreement aims to prevent the same income from being taxed twice in both countries, which can lead to double taxation and discourage cross-border trade and investment.
The agreement was signed in 2016, and it came into force in March 2019. It applies to taxes on income and capital gains in both countries, including personal income tax, corporate income tax, and capital gains tax. Under the agreement, residents of one country who derive income from the other country will be taxed only in the country of their residence, subject to certain conditions and exemptions.
One of the key benefits of the Botswana Mauritius double tax agreement is that it encourages investment between the two countries. Investors can now benefit from the reduced tax rates and the elimination of double taxation. This is especially important for companies that operate in both countries, as they can now avoid paying taxes twice on the same income or profits.
For example, a Mauritian company that invests in Botswana will not be subject to tax in Botswana on the dividends it receives from its Botswana subsidiary, provided that the company owns at least 25% of the voting rights in the subsidiary. Similarly, a Botswana resident who earns income from Mauritius will not be subject to tax in Mauritius if they are resident in Botswana and the income is sourced from Botswana.
It is worth noting that the double taxation agreement also includes provisions for the exchange of information between the tax authorities of both countries. This means that the authorities can work together to prevent tax evasion and ensure that taxpayers are not exploiting the agreement to avoid paying taxes altogether.
In conclusion, the Botswana Mauritius double tax agreement is an important treaty that benefits both countries by reducing the tax burden on residents who engage in cross-border economic activity. The agreement is expected to boost investment, facilitate trade, and promote economic growth in both countries. If you are a resident of one of these countries who engages in cross-border economic activity, it is important to familiarize yourself with the provisions of the agreement to ensure that you are taking advantage of the benefits it offers.