Renegotiation Of Tax Deal Threatens FDI

Mauritius could suffer from the central government of India's plans to plug loopholes in its tax system by renegotiating tax treaties with 65 countries. One of India's main priorities is changing the double taxation avoidance agreement (DTAA) with Mauritius. Mauritius has no capital gains tax, and under the pact the identities of Indians investing in the island nation are protected. Considering that around 43.0% of all foreign direct investment to Mauritius comes under the auspices of the DTAA, a renegotiation could seriously impact investment inflows.

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