The Mauritius dilemma

More than a decade ago, the finance ministry had tried to bring in changes to the India-Mauritius Double Taxation Avoidance Agreement (DTAA) to introduce more transparency to the flow of money from the island to India. The ensuing furore was so loud that the government had to hastily issue tax circular No 789, which made it clear that no investment from the island would fall foul of Indian tax laws if the Mauritius government issued a tax residency certificate.

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