The Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion between India and Mauritius, which is a three decade old treaty for avoidance of double taxation, has been in the eye of the storm, and efforts are underway to renegotiate the treaty. While the treaty has facilitated in promoting foreign investment into India, it is riddled with a number of issues such as round tripping, information sharing and transfer pricing. The authors examine each of these issues in depth, and explore possible solutions to these problems. Also, the views taken by Courts in India in interpreting the provisions of the treaty is discussed. The authors conclude that though the renegotiation may help plug the existing loopholes, the possibility of reaching a consensus by the two countries on various issues does not seem easy.
Intertax