importing country, without the goods being physically landed in Mauritius and the sale of aviation fuel to an airline. A manufacturing company that is engaged in the medical, biotechnology or pharmaceutical sector and that holds an Investment Certificate issued by the Economic Development Board (EDB) is subject to tax at a rate of 3% if the company satisfies the prescribed conditions on the substance of its activities and has not applied any of the exemptions specified in Part II of the Second Schedule. A Higher Education Institution registered under the Higher Education Act set up in Mauritius is also subject to tax at the rate of 3%.
From the 2020-21 year of assessment, banks are subject to a separate tax regime. Subject to certain exceptions, the first MUR1.5 billion is taxed at a rate of 5% and a tax rate of 15% applies to the taxable profits exceeding MUR1.5 billion. If the taxable profits of the bank exceed MUR1.5 billion in a year and the 2017-18 year of assessment (the base year) and if the bank satisfies certain conditions, the 15% tax rate applies to only the excess of the taxable profits for the base year over MUR1.5 billion. The prescribed conditions for the 2020-21 and 2021-22 years of assessment are satisfied if the bank grants at least 5% of its new credit facilities to the following:
• Small and medium enterprises in Mauritius
• Enterprises engaged in agriculture, manufacturing or production of renewable energy in Mauritius
• Operators in African or Asian jurisdictions
For this purpose, a credit facility is either of the following:
• A facility, whether fund-based or non-fund-based, made available to a person and containing an obligation to disburse a sum of money in exchange for a right to repayment of the amount disbursed and outstanding and to payment of interest or other charges on such amount, including a loan, overdraft and leasing facility
• An extension of the due date of a debt, any guarantee issued and any commitment to acquire a debt security or other right to payment of a sum of money
The tax rate is 5% if the taxable profits of the bank do not exceed MUR1.5 billion for the base year even if the taxable profits for the year in question exceeds MUR1.5 billion and if the bank satisfies certain conditions that have not yet been prescribed. Under the Mauritian tax laws, banks are not allowed to claim a foreign tax credit. Under an amendment made by Section 38(d) of the Finance (Miscellaneous Provisions) Act 2023, the first MUR1.5 billion of the taxable profits of a bank is taxable at a rate of 5%, and any excess is taxable at the rate of 15%.
From the 2021-22 year of assessment, the tax payable by a life insurance company is based on the higher of the tax payable under the normal rule or 10% of the relevant profit. For this purpose, relevant profit is defined as profit attributable to shareholders as adjusted by any capital gain or capital loss reflected in the income statement of the company.
A tax of 10% applies to any winnings exceeding MUR100,000 that are paid to a winner by the Mauritius National Lottery Operator, operator of the Loterie Vert, a casino operator, a hotel
Segment B banking business. Segment B banking business refers to banking transactions with nonresidents and corporations that hold a Global Business License (GBL) under the Financial Services Act 2007. The levy is computed at 10% of the chargeable income from other sources for the 2014, 2015, 2015-16, 2016-17, 2017-18 and 2018-19 years of assessment. From the 2019-20 year of assessment, the levy is included in the Value Added Tax Act. It is based on the aggregate net interest income and other income from banking transactions before deducting any expenses. The levy does not apply to banking transactions with nonresidents and companies holding a GBL under the Financial Services Act and is not payable if the bank incurs a loss. If the income that is subject to the levy is less than MUR1.2 billion, the rate of the levy is 5.5%; otherwise, the rate is reduced to 4.5%. For a bank that has been in operation since 30 June 2018, the levy is restricted to 1.5 times the levy for the 2017-18 year of assessment. The levy must be paid within five months after the year-end of the bank. The levy is not deductible for the purposes of computing the taxable profits of the bank. From the accounting period starting on or after 1 July 2023, the levy is computed at a rate of 5.5%.
“Telephony service providers,” defined as a provider of public fixed or mobile telecommunication networks and services, are subject to a solidarity levy for the 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 years of assessment. The levy equals the sum of 5% of book profit and 1.5% of turnover. The levy does not apply if, in the preceding year, the service provider incurred a loss or if its book profit did not exceed 5% of its turnover. From the 2020-21, 2021-22, 2022-23 and 2023-24 years of assessment, the levy is based on the aggregate of 5% of the accounting profit and 1.5% of the turnover of the operator. For this purpose, the accounting profit is the profit of an operator from all its activities and computed in accordance with the International Financial Reporting Standards. From the 2024-25 year of assessment and all following years of assessment, the levy is computed at a rate of 5% of the accounting profit and 1% of the turnover of the operator. If the operator incurs a loss, the levy is computed at 1% of the turnover of the operator.
Tax advantages for certain companies. The following types of companies may qualify for tax advantages:
• Freeport companies.
• Information and Communication Technology companies.
• Companies engaging in innovation-driven activities for intellectual property assets developed in Mauritius or deriving income from intellectual property assets developed in Mauritius on or after 10 June 2019.
• Companies set up on or before 30 June 2025 that are engaged in the operation of an e-commerce platform and that are issued an e-commerce certificate by the EDB are exempt from tax on their income, provided that the company satisfies its substance requirements. The exemption is restricted to five successive years starting from the year the company starts its activities.
• Companies engaged in the exploitation and use of deep-sea ocean water activities for certain specific purposes.
• Companies engaged in spinning, weaving, dyeing or knitting.
Freeport companies. Freeport operators and private Freeport developers are exempt from corporate income tax on sales made to persons outside Mauritius up to 30 June 2021, if the freeport certificate was issued on or before 14 June 2018. If the freeport certificate was issued on or after 14 June 2018, no corporate tax exemption applies. A freeport operator or private freeport developer is not subject to the CSR rules with respect to its income from exports. A freeport operator or private freeport developer is subject to tax at a rate of 3% if it satisfies all of the following conditions:
• It is engaged in the manufacturing of goods on the local market.
• The entity employs a minimum of five staff members.
• It incurs an annual expenditure of more than MUR3,500,000.
The income of a company operating as a freeport operator or private freeport developer under the Freeport Act is exempt for eight succeeding years from the year the company starts operations if the company meets the following conditions:
• It started its operations on or after 1 July 2022.
• It has invested not less than MUR50 million in its operations.
• It satisfies the prescribed substance conditions on its activities.
To date, the relevant regulations have not yet been prescribed.
Information and Communication Technology companies. Information and Communication Technology (ICT) companies are classified as tax-incentive companies. If the investment certificate of an ICT company is issued before 30 September 2006 and if the ICT company is engaged in business-process outsourcing and back-office operations or in the operation of call centers or contact centers, the ICT company may elect within 60 days of the date of the issuance of its investment certificate to have twothirds of its net income exempted from tax up to and including the income year ended 30 June 2012. This reduces the effective tax rate to 5% of taxable income. Income derived by other ICT companies from nonresidents is exempt from tax through the income year ended 30 June 2012. Income derived from residents is taxable at the incentive rate of 15%. Losses incurred during the exemption period may be carried forward to years following the expiration of the exemption period.
Innovation-driven activities. The income of a company set up on or after 1 July 2017 that is involved in innovation-driven activities for intellectual property assets developed in Mauritius is exempt from tax from the year the company starts its innovationdriven activities for a period of eight years.
Expenditure on fast charger for electric car. Expenditure on a fast charger used for an electric car used in the production of gross taxable income (essentially turnover before deduction of any expenses) qualifies for a 200% deduction.
Expenditure on medical research and development. A person engaged in medical research and development is eligible to deduct 200% of any expenditure on medical research and development performed in Mauritius. The extra deduction is not available if the person has claimed annual allowances on the relevant expenditure.
Expenditure on patents and franchises. A company is allowed to deduct 200% of its expenditure on the acquisition of patents and
franchises and the costs to comply with international quality standards and norms.
Manufacturing of pharmaceutical products, medical devices and high-tech products. Income of a company that started operations on or after 8 June 2017 and that is engaged in the manufacturing of pharmaceutical products, medical devices and high-tech products is exempt from tax for a period of eight years from the year the company begins its operations.
Exploitation and use of deep ocean water. Income of a company from the exploitation and use of deep-sea ocean water for providing air conditioning installations, facilities and services is exempt from tax.
Contribution to COVID-19 Solidarity Fund. Contributions made to the COVID-19 Solidarity Fund, which is referred to in the Finance and Audit (COVID-19 Solidarity Fund) Regulations 2020, during the 2019-20 and 2020-21 income years qualify for a deduction in the year in which the contribution is made. Any unrelieved amount may be utilized in the following two years.
Donations to charitable institutions. A company that makes a donation through electronic means to a charitable institution is allowed a corporate tax deduction of three times the amount of the donation, subject to a maximum of MUR1 million in any given year, if the charitable institution is involved in any of the following activities:
• Supporting persons with health issues and disabilities
• Protection or rehabilitation of street children
• Animal welfare and protection
Joint tertiary education with African universities. If a higher education institution registered under the Higher Education Act enters into a contract with an African university to provide joint tertiary education for the final year of a course in Mauritius, it may deduct twice the amount of any expenditure incurred on the costs incurred on the conclusion of the contract with the African university. Costs for the purposes of the double deduction includes marketing costs, costs of hiring consultants and such other costs as the EDB may approve. Cost for this purpose specifically excludes any cost of a capital nature.
Participation in approved films. A Mauritian incorporated company may deduct from its gross income, twice the amount of any expenditure incurred in the financing, sponsorship, marketing or distribution of a film provided that the film has been approved under Film Rebate Scheme under the Economic Board Act, and after postproduction, is made up of at least 90% of the principal photography of Mauritius, as certified by the EDB.
Income derived in collaboration with the Mauritius Africa Fund. Income of a company from activities carried out as a developer or project financing institution in collaboration with the Mauritius Africa Fund for the purpose of developing infrastructure in a Special Economic Zone is exempt for a period of five years from the year in which the company begins performing the qualifying activities. A Special Economic Zone is defined as a part of a foreign territory where business activity may be conducted under preferential terms and which is being developed, managed or
promoted by the Mauritius Africa Fund Limited or any of its subsidiaries or affiliates.
Sheltered farming scheme. Income of a person from any activity under the sheltered farming scheme set up by the Food and Agricultural Research and Extension Institute is exempt from income tax for eight years from the year in which the person starts the relevant activity.
Companies engaging in offshore activities. Offshore business activities may be conducted through GBL companies or companies holding an Authorized Company License (AC companies). AC companies must conduct their activities outside of Mauritius or with such category of persons as may be specified in the Financial Services Commission (FSC) Rules. For this purpose, the categories of persons specified in the FSC Rules are the following:
• An AC company
• A holder of a GBL
• A holder of a GBL1 issued on or before 16 October 2017
• A holder of a GBL2 issued on or before 16 October 2017
AC companies must have their central management and control outside of Mauritius.
Mauritian residents, including GBL companies, are eligible for a foreign tax credit on their foreign-source income. The foreign tax credit is generally the lower of the Mauritian tax and the foreign tax. If the shareholding in the foreign company is 5% or more, an underlying tax credit can be claimed. A tax-sparing credit can also be claimed. Dividends paid to residents and nonresidents and royalties paid by GBL companies out of their foreign-source income to nonresidents are exempt from tax. Interest paid by GBL companies to nonresidents that do not have a place of business in Mauritius is exempt from tax to the extent that the interest is paid out of its foreign-source income. Effective from 1 January 2019, a royalty paid by any company to a nonresident out of its foreignsource income is exempt from tax. GBL1 companies may be considered residents of Mauritius for purposes of double tax treaties.
Under an amendment to the Financial Services Act (FSA) contained in the FMPA 2018, the FSC no longer issues a Category 1 Global Business License (GBL1) from 1 January 2019; instead, it issues a GBL. A GBL company is required to carry on its core income-generating activities (CIGA) in Mauritius and is required to have its central management and control in Mauritius. It should be administered by a management company. Its CIGA must be carried out in Mauritius as a result of the following:
• The direct or indirect employment of a reasonable number of suitably qualified persons
• The fact that it incurs expenses that are proportionate with to its level of activities
The FSA provides that the CIGA for a company with a GBL is supposed to be in Mauritius, but this should be determined in accordance with the Income Tax Act. However, the Income Tax Act does not require the CIGA for a company with a GBL to be in Mauritius. The Income Tax Act only requires that the CIGA to
be in Mauritius in the context of certain exempt income, such as foreign dividend and interest income.
A GBL is exempt from the CSR rules, and any outgoing interest from its foreign-source income is exempt from tax in Mauritius.
If a GBL1 was issued on or before 16 October 2017, the company will be deemed to be a GBL from 1 July 2021; otherwise, it will be deemed to be a GBL from 1 January 2019.
The FSC no longer issues a Category 2 Global Business License (GBL2). The corporate tax exemption for GBL2 companies will terminate on 30 June 2021 if the GBL2 was issued on or before 16 October 2017. The exemption does not apply to income from the following:
• Intellectual property assets acquired from a related party after 16 October 2017
• Intellectual property assets acquired from a third party after 30 June 2018
• New intellectual property assets created after 30 June 2018
• Specific assets acquired or projects started after 31 December 2018, as may be determined by the MRA
A company may be granted the status of Authorized Company by the FSC if all of the following conditions are satisfied:
• A majority of the shares, voting rights or the legal or beneficial interests in the company, other than a bank, are held or controlled by non-Mauritian citizens.
• The company conducts business principally outside of Mauritius or with such category of persons, as may be specified in the FSC Rules.
• The company has its central management and control outside of Mauritius.
An Authorized Company is not supposed to transact in Mauritius. Consequently, it is not generally expected to have Mauritiansource income.
From 1 January 2019, transactions with nonresidents and other GBL companies are not automatically considered to be foreignsource income for GBL1 companies and banks. If a GBL1 has been issued on or before 16 October 2017, the income is considered to be foreign-source income up to 30 June 2021. For a bank, the current definition applies up to the 2019-20 year of assessment.
The presumed foreign tax no longer applies from 1 January 2019. Under transitional rules, it will continue to apply to a GBL1 company up to 30 June 2021 if the GBL1 was issued on or before 16 October 2017. This excludes income from the following:
• Intellectual property assets acquired from a related party after 16 October 2017
• Intellectual property assets acquired from a third party after 30 June 2018
• Intellectual property assets created after 30 June 2018
• Specific assets acquired or projects started after 31 December 2018, as may be determined by the MRA
In the case of banks, the presumed foreign tax will continue to apply up to the 2019-20 year of assessment.
the shares are acquired and is spread equally over the four- or six-year period. Any unused portion of the tax credit may be carried forward to subsequent income years, subject to a maximum period of five consecutive income years beginning with the income year of the investment.
Under an amendment contained in the FMPA 2016, a company that has invested MUR60 million or more or at least 20% in the stated capital of a spinning factory, whichever is higher, during the years of 2003 to 2008 is allowed an investment tax credit (ITC) of either 15% of the investment over a four-year period or 10% of the investment over six years. The credit is allowed from the year the investment is made and is reduced by any credit previously claimed with respect to the same investment. A similar form of credit applies to a company that has invested in the stated capital of a company engaged in dyeing, knitting and weaving activities during the same period; the minimum amount of the investment is MUR10 million or at least 20% of the stated capital of the company. The ITC may be carried forward for a consecutive period of six years from the year of the investment and may be applied against any past tax liability; however, no refund is made for tax already paid. The ITC may be set off against the 30% of the tax claimed that was required to be paid for an objection to a notice of assessment to be valid; any excess ITC can be offset against any tax payable from 1 September 2016. The ITC can offset against any past tax liability for any case under dispute. If the ITC is offset against the tax liability for a pending case before any court, judicial or quasi-judicial body, the company should withdraw its case.
Manufacturing companies or companies producing “specified goods or products” can claim a tax credit on the total capital expenditure incurred on the acquisition of new plant and machinery (excluding motor cars) exceeding MUR100 million during the period of 1 January 2014 through 30 June 2016. The annual tax credit equals 5% of the cost of the plant and machinery. The credit is subtracted from the income tax liability in the year of acquisition and the two subsequent income years. Any unrelieved tax credit with respect to an income year may be carried forward to the following income year. The carryforward applies to a maximum of five consecutive income years following the income year in which the capital expenditure is incurred. The following are the “specified goods or products”:
• Computers
• Electrical equipment
• Film
• Furniture
• Jewelry and bijouterie
• Medical and dental instruments, devices and supplies
• Pharmaceuticals or medicinal chemicals
• Ships and boats
• Textile
• Wearing apparel
For tax purposes, manufacturing activities include the following:
• The assembly of parts into a piece of machinery or equipment or other product
• Retreading of used tires
• Recycling of waste
Under an amendment contained in the FMPA 2016, companies engaged in manufacturing activities or companies producing the “specified goods or products” are also allowed a credit in the year of acquisition and the subsequent two years at the following rates for capital expenditure incurred on the following new assets during the period from 1 July 2016 through 30 June 2020.
Any excess credit may be carried forward to the next year. However, the credit cannot be used in a period beyond 10 years following the year in which the capital expenditure is incurred. If the asset is sold within five years from the date of its acquisition, the credit is clawed back.
The Income Tax (Amendment) Regulations 2024 issued on 5 January 2024 amended Section 23D such that a company engaged in the manufacturing of medical, biotechnical or pharmaceutical products is subject to a reduced corporate tax rate of 3% if it satisfies the prescribed conditions and does not benefit from the exemption that is the subject matter of Part II of the Second Schedule to the Act.
A company that invests in the share capital of a subsidiary company engaged in the setting up and management of an accredited business incubator is allowed to claim a credit in the year of investment and the subsequent two years. The credit equals 15% of the amount invested, subject to a maximum amount of MUR3 million. Any excess can be carried forward to the next income year and is clawed back if the shares are disposed of within five years after the year of the investment.
Income of a company incorporated on or after 1 July 2021 and holding an Investment Certificate issued by the EDB is exempt for a period of eight succeeding years from the year the company is incorporated.
Income of a corporation holding a Family Office (Single) Licence or a Family Office (Multiple) Licence issued on or after 1 September 2016 by the FSC is exempt from tax for a period of 10 years from the year the corporation was granted the license, provided that the income is from activities covered under the relevant license and the corporation satisfies the conditions of minimum employment and the substance of its activities as specified by the FSC.
Partial exemption. Eighty percent of the following types of income is exempt from tax from 1 January 2019:
Additional investment allowance to companies affected by the COVID-19 pandemic. A company that has incurred capital expenditure on the acquisition of new plant and machinery, excluding motor cars, during the period from 1 March to 30 June 2020 is entitled to 100% additional investment allowance provided that it satisfies the MRA that it has been adversely affected by the COVID-19 pandemic.
Extra deduction for emoluments for homeworkers. An extra deduction (that is, the expense is effectively relieved twice for corporate income tax purposes) applies to employers that have full-time homeworkers if the following conditions are satisfied:
• The employer has acquired the necessary information technology system to enable the worker to work from home.
• The employer has more than five homeworkers at any time during the year.
• The monthly emoluments do not exceed MUR100,000.
• The homeworker started to work from home on or after 1 July 2018.
• The emoluments relate to July 2018 or a later month and apply for a period not exceeding 24 months.
Tax credit on information technology system. A tax credit applies to expenditure incurred on an information and technology system for the purpose of employing homeworkers. The credit equals 5% of the expenditure incurred and can be claimed in the year the capital expenditure is incurred and in the following two years.
Investment in nurseries. An expenditure by a company on nurseries is eligible for a 200% deduction.
Capital gains. Capital gains are not subject to income tax. The Finance (Miscellaneous Provisions) Act 2010 (FMPA 2010) introduced a capital gains tax regime for transactions in immovable properties or interests in immovable properties; however, it was repealed by the Finance (Miscellaneous Provisions) Act 2011, effective from 5 November 2011.
Withholding taxes. Withholding taxes apply to certain payments. The tax withheld at source is an interim tax payment that may or may not be the final tax liability. Amounts deducted are credited to the final tax liability of the taxpayer for the relevant tax year.
The following are the withholding tax rates.
to contractors and subcontractors
Payments to accountants or accounting firms, architects, attorneys, barristers, engineers, interior decorators or designers, land surveyors, legal consultants, medical service providers, project managers in the construction industry, property valuers, quantity surveyors, solicitors, tax advisors and their representatives 5 Payments made by insurance companies to motor surveyors and other persons for repairs of motor
vehicles of policyholders 3
Payments made by a ministry, government department, local authority, statutory body or the Rodrigues Regional Assembly on contracts, other than payments to contractor and subcontractors and payments to service providers specified in the preceding entry above For the procurement of goods and services under a single contract, if the payment exceeds MUR300,000 1
For the procurement of goods under a contract, if the payment exceeds MUR100,000 1
For the procurement of services under a contract, if the payment exceeds MUR30,000 3
Payments made to the owner of immovable property or agent, other than a hotel, unless the payments are made to a body of persons specified in Part I of the Second Schedule or a person exempt from income tax as a result of any other enactment, by a tour operator or travel agent, other than an individual, an Integrated Resort Scheme (IRS) or Real Estate Development Scheme (RES) company or a provider of property management services designated by an IRS or RES company, under the Investment (Real Estate Development) Regulations 2007, or any other agent, other than an individual, carrying on the business of providing services with respect to the leasing of properties 5
Payments made to a provider of security services, cleaning services or pest management services and other ancillary services 3
Payments made by insurance companies to motor surveyors and mechanics 3
Payments made to nonresidents for services rendered in Mauritius 10
(a) The withholding taxes do not apply to a company, partnership or succession (estate of a deceased person) with an annual turnover MUR6 million or less, except for the award of a contract for construction works.
(b) This withholding tax applies to interest paid by any person, other than by a bank or nonbank deposit-taking institution under the Banking Act, to any person, other than a company resident in Mauritius.
(c) This withholding tax is imposed on residents and nonresidents. The withholding tax rate is 10% for residents and 15% for nonresidents. For a recipient of royalties that is resident in a treaty country, the treaty rate applies if it is lower than 15%. The treaty rate does not apply if the royalty is paid out of the foreign-source income of a company.
If a recipient of a payment proves to the Director-General of the MRA that the recipient is not liable for tax, the Director-General may, by written notice to the payer, direct that no tax be withheld from the payment to the recipient.
The
the
For the purposes of the annual allowances, green technology equipment includes the following types of equipment:
• Renewable energy equipment
• Energy-efficient equipment or noise-control devices
• Water-efficient plant and machinery and rainwater harvesting equipment and systems
• Pollution-control equipment or devices, including wastewater recycling equipment
• Effective chemical hazard control devices
• Desalination plant
• Composting equipment
• Equipment for shredding, sorting and compacting plastic and paper for recycling
• Equipment and machinery used for eliminating, reducing or transforming industrial waste
Any unused annual allowances that arise as a result of the above increased rates can be carried forward indefinitely. Expenditure on passenger cars is not eligible for increased annual allowances.
Capital allowances are subject to recapture on the sale of an asset to the extent the sales price exceeds the tax value after depreciation. Amounts recaptured are included in ordinary income and are subject to tax at the normal tax rate. To the extent that the sales price is lower than the depreciated value, an allowance is granted.
Under an amendment contained in the Finance (Miscellaneous Provisions) Act 2010, the total annual allowances on a motor car cannot exceed MUR3 million. The MUR3 million cap does not apply to persons engaged in the business of tour operator or car rental.
Expenditure on deep ocean water air conditioning. Expenditure on deep ocean water air conditioning is eligible for a 200% deduction over a period of five years from the year of the incurrence of the expenditure. This measure is effective as from 1 July 2017. A tax loss resulting from expenditure on deep ocean water air conditioning is not subject to the five-year restriction on the utilization of tax losses (see Relief for losses).
Expenditure on water desalination plant. Expenditure on the acquisition and setting up of a water desalination plant is eligible for a 200% deduction from 1 July 2017. A tax loss that results from expenditure on a water desalination plant is not subject to the five-year restriction on the utilization of tax losses (see Relief for losses).
Research and development. Any qualifying expenditure on research and development (R&D) incurred during the period of 1 July 2017 through 30 June 2027 (the qualifying period) is eligible for a 200% deduction if the relevant expenditure is directly related to an existing trade or business and if the R&D is carried on in Mauritius. If the qualifying expenditure incurred during the qualifying period does not relate to an existing trade or business, the MRA may allow the expenditure. The qualifying expenditure relates to any R&D and specifically includes expenditure on innovation, improvement or development of a process, product or service, staff costs, consumable items, computer software directly used in R&D and subcontracted R&D. The time limit of five
If a company takes over a company engaged in manufacturing activities or if two or more companies engaged in manufacturing activities merge into one company, any unrelieved losses of the acquired company or merging companies may be transferred to the acquirer or to the company resulting from the merger in the income year of the takeover or merger, subject to certain conditions relating to the safeguarding of employment or to such other terms and conditions that may be established by the MOFED. The loss transferred is withdrawn if, within three years from the date of the takeover or merger, more than 50% of the employees is made redundant. The FMPA 2016 extended the scope of this provision to a transaction in which a company takes over or acquires the whole or part of the undertaking of another company if the MOFED has deemed such transaction to be in the public interest. If a change of more than 50% in the shareholding of a manufacturing company occurs, the tax loss may nevertheless be carried forward if the MOFED certifies that the change in the shareholding is in the public interest and is satisfied that there is compliance with the conditions relating to the safeguard of employment. In addition, if there is a change in the shareholding of more than 50% in a manufacturing company or in a company facing financial difficulty, any unrelieved tax loss may be carried forward if the MOFED is satisfied that the conditions relating to the safeguard of employment or other conditions that the MOFED may impose are complied with by the company.
D. Other significant taxes
The following table summarizes other significant taxes.
6 Land transfer tax; payable by transferor based on the value of the immovable property transferred; also applies to transfers of shares that result in a change in control of a company that owns
Tax on transfer of leasehold rights in state land; based on the open market value of the leasehold rights; payable equally by the transferor and the transferee 20 Registration duty; payable on the registration of certain transactions, such as the sale of land; based on the value of the property transferred; payable by the transferee; certain transactions are not subject to the duty 5
E. Miscellaneous matters
Foreign-exchange controls. The Exchange Control Act was suspended in 1993. Consequently, approval of the Bank of Mauritius is no longer required for transactions involving foreign exchange.
Anti-avoidance legislation. Anti-avoidance provisions apply to interest on debentures issued by reference to shares, excessive remuneration to shareholders or directors, benefits to shareholders, excessive management expenses, leases with inadequate rent, rights over income retained and other transactions designed to avoid tax liability. Certain of these items are discussed below.
Interest on debentures issued by reference to shares. If a company issues debentures in the proportion of shares held by each shareholder, the interest on the debentures is treated as a dividend and is therefore not an allowable deduction for the company. The 2004 Finance Act provides that such interest on the debentures is not treated as a dividend for the shareholder.
Benefits to shareholders. If a benefit of any nature, whether in money or money’s worth, is granted by a company to a shareholder or a party related to the shareholder, the value of the benefit is deemed to be a taxable benefit in the hands of the shareholder or the related party.
Rights over income retained. If a person transfers property or any right to income to a related party and retains or obtains power to enjoy income from the property or the right, the income is deemed to be derived by the transferor.
Controlled foreign companies. A foreign entity is considered to be a controlled foreign company (CFC) if its non-distributed income arises from non-genuine arrangements that have been implemented for the essential purpose to obtain a tax benefit. A foreign company is considered to be a CFC if more than 50% of its participation rights are held directly or indirectly by the Mauritian resident company and its “related parties.” For this purpose, related parties are the following:
• An entity in which the Mauritian resident company holds directly or indirectly a participation of voting rights, capital or entitlement to profit of at least 25%
• An individual or entity that holds directly or indirectly a participation of the voting rights or capital ownership in the company of at least 25% of the profits of the company
The income to be attributed to the Mauritian resident company should be consistent with the arm’s-length principle and be limited to the assets and risks linked to the significant people functions carried on by the controlling company. The foreign tax credit applies in connection with any foreign tax suffered by the CFC.
A company is not regarded as a CFC if any of the following conditions are satisfied:
• The accounting profit and non-trading income are both less than EUR750,000.
• The accounting profit is less than 10% of its operating costs.
• The tax rate in the country of residence of the CFC is more than 50% of the tax rate in Mauritius.
COVID-19 Levy. A company that has benefited from the allowance under the Wage Assistance Scheme is required to repay the allowance through the COVID-19 Levy over a period of two years. The levy is restricted to a maximum of 15% of the taxable profits of the company before any tax loss brought forward. If an
(n) Royalties paid by GBL1 companies to nonresidents are exempt from tax. Royalties paid by other companies to nonresident companies are subject to tax at a rate of 15%.
(o) The 5% rate applies if the recipient of the dividends holds directly at least 15% of the capital of the payer. The 10% rate applies if the recipient of the dividends holds directly at least 10%, but less than 15%, of the capital of the payer. The 15% rate applies to other dividends.
(p) The 10% rate applies if the recipient of the interest is a financial institution or an insurance company. The 15% rate applies to other interest payments.
(q) The 5% rate applies if the recipient is a company that owns at least 25% of the share capital of the paying company. Otherwise, the rate is 15%.
(r) The 5% rate applies if the recipient is a company with a shareholding of at least 10%. Otherwise, the rate is 15%.
(s) The 5% rate applies if the recipient owns less than 25% of the company paying the dividends.
(t) The 5% rate applies if the recipient is a company with a shareholding of at least 10%. Otherwise, the rate is 10%.
(u) The 0% rate applies if the interest arises on a debt instrument listed on the Stock Exchange of Mauritius, the Johannesburg Stock Exchange or any other stock exchange agreed to by the competent authorities of the contracting states.
(v) The 5% rate applies if the recipient is a company with a direct or indirect shareholding of at least 25% in the share capital of the paying company. Otherwise, the rate is 10%.
(w) The 5% rate applies if the recipient is the beneficial owner of the dividends and owns less than 25% of the share capital of the company.
(x) The 5% rate applies if the recipient is a company with a direct shareholding of at least 10% in the share capital of the paying company. Otherwise, the rate is 7.5%.
(y) The tax treaty has been terminated and the year ending 30 June 2021 is the last year of application in Mauritius.
(z) The right to tax rests with the country of residence if the recipient is a company. Interest is not subject to tax in Estonia if it is paid to the following:
• The government of Mauritius or a local authority thereof
• The Bank of Mauritius
• Any institution wholly or mainly owned by the Republic of Mauritius as may be agreed from time to time by the competent authorities of the contracting states
Interest is not subject to tax in Mauritius if it is paid to the following:
• The government of Estonia or a local authority thereof
• The Bank of Estonia
• The Rural Development Foundation
• The Foundation KredEx
• The Enterprise Estonia Foundation
• Any institution wholly or mainly owned by the government of Estonia as may be agreed from time to time between the competent authorities of the contracting states
Interest is also exempt from tax in Estonia or Mauritius, as the case may be, if is paid to an investment fund established in and supervised by the state of Estonia or Mauritius, as the case may be.
Tax treaties with Botswana (new), Gambia, Gibraltar, Guyana and Malawi await signature. Mauritius is negotiating tax treaties with Algeria, Burkina Faso, Canada, Côte d’Ivoire, the Czech Republic, Greece, Iran, Mali, Montenegro, Portugal, St. Kitts and Nevis, Saudi Arabia, Senegal (new), Spain, Sudan, Tanzania, Türkiye, Vietnam, Yemen and Zambia (new; also, see footnote [y] above).
On 7 March 2024, India and Mauritius signed a protocol to amend their double tax treaty. The 2024 protocol proposes to incorporate the minimum standards of anti-abuse provisions (that is, the Preamble and the Principal Purpose Test, which will act as a means to deny treaty benefits if one of the principal purposes of the arrangement or transaction is to obtain the double tax treaty benefit. The 2024 protocol will be effective from the date of entry into force, without regard to the date on which the taxes are levied or the tax years to which taxes relate.