'PPT shouldn't be a matter of concern for genuine investors,' says Mauritius Minister for Financial Services Jyoti Jeetun

The Mauritius Cabinet approved ratification of the India-Mauritius Double Taxation Avoidance Agreement (DTAA) Protocol on July 17, which introduces the principal purpose test (PPT) anti-abuse rule to prevent tax evasion and treaty shopping. Speaking to Dipanjan Roy Chaudhury, Mauritius Minister for Financial Services Jyoti Jeetun said the introduction of PPT shouldn't be a matter of concern for genuine investors undertaking real economic activity in the island nation. She emphasised that it's mainly aimed at ensuring the treaty benefits continue to support real investment and business activity in Mauritius while maintaining the credibility of the treaty framework in line with evolving international standards, Edited excerpts:

The Mauritius Cabinet approved the ratification of the India-Mauritius DTAA Protocol on July 17. What does this decision mean?

The Cabinet decision was taken after a very careful review and detailed consideration of all aspects of the matter. When we took office in November 2024, the Protocol had already been signed by both governments but had not been ratified by the Mauritius government. There were numerous concerns from the industry in India and Mauritius.


Before the Cabinet approval, we had extensive discussions with stakeholders, industry representatives, and our counterparts in India. The DTAA has been an important foundation of our economic relationship with India for more than four decades. It has supported investments to the tune of some $170 billion in India, strengthened business cooperation, and contributed significantly to Mauritius becoming a trusted international financial centre.

Some concerns have been raised by stakeholders after the Cabinet decision. What were the main concerns?

The main concerns relate to whether the PPT could create additional uncertainty for investors; whether genuine investors could face increased scrutiny; whether the Protocol will only apply prospectively; whether the amendment to the Preamble of the protocol would impact the economic relationship between India and Mauritius; whether investments made before April 1, 2017 would continue to receive grandfathering protection or will be subject to PPT; how will the PPT be interpreted and applied; and whether Mauritius will be disadvantaged compared to other jurisdictions such as the Netherlands.

Should genuine investors be concerned about the PPT?

The introduction of the PPT should not be a matter of concern for genuine investors who have real economic activities and a genuine substance in Mauritius. The purpose of the PPT is to ensure that treaty benefits continue to support genuine investment and business activities while maintaining the credibility of the treaty framework in line with evolving international standards. Mauritius has always supported substance-based investments. Our regulatory framework already places strong emphasis on economic substance and compliance requirements.