The term “round tripping” refers to a number of business-to-business transactions that increase the turnover of the companies involved, but ultimately bring no real economic benefit to either company. Although not necessarily illegal, round triggering is at best dishonest. It is important for a businessman to be able to identify when a transaction amounts to a round trigger — and also important to know when a transaction that might look like a round trigger is actually legitimate. The trip is referred to as money that leaves the country through different channels and often makes its return to the country as a foreign investment. This is most often dirty money and often has to be used to manipulate the stock price. The roundtrip trade largely refers to the unethical practice of constantly buying and selling shares of the same security to manipulate observers, to believe that security is in high demand. This behavior is very different from a legal and ethical tour-trip trade that each investor concludes when he buys a security and sells it later. India has already revised similar tax agreements with Mauritius and Cyprus, the other two main sources of foreign direct investment in the country. Another example of acceptable roundtrip transactions is an exchange in which establishments sell securities to another person or institution, while agreeing to redeem the same amount at the same price in the future.

Commercial banks and derivatives regularly engage in this type of trading. But the dynamics of this type of exchange do not inflate volume statistics or balance sheet values. In a contextualized approach, the authors took up DBAA 1 between Mauritius and India to determine the extent to which RoundTripping and Treaty Shopping affect the bilateral agreement between India and Mauritius. The DBAA between India and Mauritius (2) was signed in August 1982 and the spirit of the bilateral agreement and the negotiations that followed should provide for exemptions to shareholders, since persons already taxed in Mauritius should no longer be taxed. However, capital gains tax exemptions in Mauricie would also mean that tax evasion will soon become the focus of recent negotiations between the two countries, with serious concerns about tax abuses, tripping and contract purchases. Although Mauritius is considered a tax haven, the ties between the two countries remain very strong, both historically and financially, with reciprocal economic and financial support in a win-win situation. In fact, Mauritius contributes to nearly 34% of total foreign direct investment (DIDE) going to India, becoming one of the largest foreign direct investment to India and in direct competition with other countries such as Singapore. However, the Indian government considered that there were significant abuses against tax evasion in Mauritius, in addition to dirty money and money laundering, and as a result, India had to find itself in deep waters to modify its DBAA, in order to avoid disruption and hence contract shopping.

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