Al­pha­bet soup of reg­u­la­tion

The Africa Report - - COUNTRY FOCUS - N.N.

A BL­IZ­ZARD OF LET­TERS is bat­ter­ing the off­shore fi­nan­cial sec­tor across the globe. One of the more ex­is­ten­tial threats comes from two Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and Devel­op­ment di­rec­tives: on BEPS – Base Ero­sion Profit Shift­ing – and the other CRS – the Com­mon Reporting Stan­dard. Th­ese force off­shore hubs like Mau­ri­tius to prove that they are an eco­nomic ju­ris­dic­tion of sub­stance, rather than just act­ing as a place to help com­pa­nies avoid tax. In­dia is get­ting se­ri­ous about tax, too. The dou­ble tax avoid­ance agree­ment has been re­vised, chang­ing the eco­nomics for In­dia-fo­cused funds that chan­nelled money through Mau­ri­tius to avoid pay­ing tax twice – be­cause, for some un­scrupu­lous in­di­vid­u­als, it was used to avoid pay­ing tax even once. In­dia is also bring­ing in its GAAR – Gen­eral Anti-avoid­ance Rules – which will fur­ther tighten up the sys­tem. Mean­while, the US has passed the FATCA or For­eign Ac­count Tax Com­pli­ance Act, mak­ing it harder for Us-based funds to avoid the tax­man. Mau­ri­tius is re­spond­ing with its own al­pha­bet soup: a slew of li­cences to at­tract a new gen­er­a­tion of more so­phis­ti­cated off­shore ser­vice providers. They in­clude the GLAS, or Global Le­gal Ad­vi­sory Ser­vices li­cence, and the fin­te­chori­ented RSL or Reg­u­la­tory Sand­box Li­cense.

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