News & Media 17th Apr 2024
Sheikh Rishad from BW Businessworld writes on “India-Mauritius DTAA Changes May Decrease FPI Inflows From Mauritius: Experts” with expert comments from our Partner Mitesh Jain.
The article talks about the amendment of the Double Taxation Avoidance Agreement (DTAA) by India and Mauritius plugs another loophole in the tax treaty signaling a paradigm shift from promoting bilateral investment flows to preventing tax evasion.
The most recent amendment includes a Principal Purpose Test (PPT) that helps in deciding whether a foreign investor is eligible for treaty benefits or if their primary motive for routing investments via Mauritius is to get tax benefits. The protocol seeks to amend the very preamble of the tax treaty to showcase the intent to mitigate opportunities for non-taxation or reduced taxation in line with Article 6 of the Multilateral Instrument (MLI) Base Erosion Profit Shifting.