Kathmandu – The Government of Nepal has officially terminated its Double Taxation Avoidance Agreement (DTAA) with Mauritius, ending a 25-year-old treaty first signed on August 3, 1999.
The decision was endorsed by the Council of Ministers on Monday, and the Department of Inland Revenue has already issued formal notice through diplomatic channels. According to Director General Madan Dahal, the termination was communicated under Article 29(1) of the treaty, which sets out the formal exit process.
Department spokesperson Basudev Poudel said the move aligns Nepal’s international tax framework with major shifts in both domestic law and global tax standards. Nepal’s Income Tax Act 2058—particularly its anti-abuse provision under Section 73(5)—has introduced rules that affect the execution of older treaties like the one with Mauritius.
The department also noted that global tax norms have changed significantly since 1999, driven by transparency reforms, anti-abuse initiatives, and global efforts such as Base Erosion and Profit Shifting (BEPS). Ending the outdated agreement, officials said, opens the door for modern treaties adhering to current international minimum standards.
Poudel emphasized that despite the termination, Nepal remains open to negotiating a new DTAA and a bilateral investment protection agreement with Mauritius. Any future arrangement, he added, will be based on mutual benefit, transparency, and compatibility with evolving global and domestic economic conditions.
The termination will take effect from the upcoming fiscal year, starting July 1, 2083/84.
