Mauritius- India: DTAA Treaty Protocol Still Unratified

The Mauritius Revenue Authority (MRA) has clarified that the protocol amending the Mauritius-India Double Taxation Avoidance Agreement (DTAA) is still pending ratification.

The MRA stated that once ratified and notified by both countries, the protocol will amend the DTAA to comply with base erosion and profit shifting minimum standards.

This statement from the MRA comes in response to recent comments from Indian income tax authorities on social media, indicating that the protocol has not yet been ratified and notified under Section 90 of the Income Tax Act.

According to the MRA, the protocol will come into force on the later of the two countries’ notifications.

In the meantime, stakeholders will be provided with clarificatory information on the amendments being made to the Mauritius-India DTAA.

One key amendment included in the protocol is the addition of a principal purpose test, aimed at ensuring that treaty benefits are only granted for transactions with a legitimate purpose.

However, questions remain regarding the application of the PPT to grandfathered investments, and further clarity is needed from tax authorities on this matter.

India and Mauritius signed the amendment to the DTAA on March 7, but until both countries officially ratify and notify the protocol, the changes will not come into effect.

Source: The Hindu Business Line