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India, Mauritius sign protocol to amend tax treaty

Category : International
Published on: April 17 2024 Share on facebook

  • India has signed a protocol amending the Double Taxation Avoidance Agreement (DTAA) with Mauritius to prevent misuse of the treaty for tax evasion or avoidance.
  • The amended agreement includes what is called the principal purpose test (PPT), which essentially stipulates that tax benefits under the treaty will not apply if it is established that obtaining a duty benefit is a reason for any transaction. Was the main objective or system.
  • The new protocol on DTAA was signed on March 7 this year. The latest amendment includes a Principal Purpose Test (PPT) to decide whether a foreign investor is genuinely eligible for treaty benefits, or whether the primary reason for routing the investment through Mauritius was tax benefits.
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