India adds principal purpose test to Mauritius tax treaty
In short
India has added a Principal Purpose Test to its tax treaty with Mauritius. From August 2026, tax authorities can deny treaty benefits if getting tax relief is the main purpose.
This matters for foreign investors who use Mauritius for investments into India. The reporting does not say which investors will be affected or how many deals may change.
What the reporting says
India has implemented a Principal Purpose Test in the India-Mauritius Double Taxation Avoidance Agreement, according to the publisher summary. The change lets tax authorities deny treaty benefits when tax relief is found to be a principal purpose, and it is set to take effect from August 2026. The reporting says it will affect foreign investors using Mauritius and may change how treaty structures are assessed, but specific cases are not stated.
Why it matters
India has implemented a Principal Purpose Test in the India-Mauritius tax treaty, with the change effective from August 2026. The summary says tax authorities may deny benefits if tax relief is a principal purpose, which could affect foreign investors using Mauritius for India-bound investments and alter treaty-based structuring. The reporting does not specify impacted transactions or amounts.