In this section:
Scope of Income Tax
Income Tax Rates
Branch or Subsidiary?
Calculation of Taxable Base
Filing Requirements and Payment of Tax
taxation of resident Mauritian companies
is governed by the Income Tax Act 1995,
which is substantially based on UK tax
law. However, there are special taxation
regimes: for companies operating offshore
under the Financial Services Act 2007,
supervised by the Financial Services Commission),
for freeport companies, and for offshore
trusts, see Offshore
Legal and Tax Regimes.
company is treated as resident in Mauritius
if it is incorporated in Mauritius or
if it is managed and controlled from Mauritius.
A resident company is taxed on its worldwide
income, which includes foreign-source
income includes rents, dividends, royalties
and interest; however, dividends paid
by companies listed on the stock exchange,
and companies which pay the full tax rate
are exempt from tax in the hands of the
receiving shareholder, whether resident
or not. There is no capital gains tax,
except on gains arising from the parcelling
out of land, see Capital Gains
(Morcellement) Tax below.
Other capital gains are not included in
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Mauritius Rates of Income Tax
The rate of corporate income tax in Mauritius
is currently 15% on chargeable income.
See Offshore Legal
and Tax Regimes and Incentive
Tax Regimes below for details of lower
rates applying to Global Business Companies
Category 1 and Category 2 companies.
Prime Minister and Finance Minister Rama
Sithanen unveiled an interim budget in
May 2009, containing a fivefold Action
Plan for the next eighteen months, designed
to combat the effects of the global economic
on the measures contained in the Additional
Stimulus Package announced in December
2008, the Budget served to underline the
importance of solidarity in overcoming
the financial downturn. Therefore, a series
of new levies was imposed on targeted
affluent sectors intended to mobilise
additional resources, vital to achieving
the plan’s objectives.
government introduced the following new
A solidarity levy on the providers of fixed
and mobile telephone services to be payable
until the end of December 2012. A levy of
5% of profits and 1.5% of turnover applies
to all profitable companies.
The special levy on profitable banks increased
to 1% of turnover, plus 3.4% of profits over
the course of the next two financial years.
This will reduce to 1.7% on book profit and
0.5% on operating income from 1 January 2013.
Profitable firms are required either to spend
2% of their profits on government-approved
Corporate Social Responsibility schemes, or
to transfer these funds directly to the government
to be used in the fight against poverty.
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Mauritius Branch or Subsidiary
Branches and resident subsidiary companies pay
tax in Mauritius on the same basis; dividends
(for the subsidiary) and net profits (for the
branch) can both be remitted abroad without deduction
of withholding tax. However, taxable profits are
calculated somewhat differently: a subsidiary
can deduct interest and royalties paid to its
parent but cannot make an allowance for head office
expenses, whereas a branch can deduct reasonable
head office expenses but cannot deduct interest
and royalties paid over.
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Mauritius Calculation of Taxable Base
Expenditure and losses are generally allowable
in the year in which they are incurred to the
extent that they are incurred in the production
of gross taxable income. The following are some
particular types of deduction that are permitted
and investment allowances based on actual
cost at varying rates depending on the type
losses from trading;
and irrecoverable debts;
of overseas marketing costs for tourist or
following are some particular types of deduction
that are not permitted:
losses on capital assets (added to cost base);
interest, when the debentures are issued in
proportion to shareholdings (treated as distributions);
fees paid to directors or their families (treated
income and capital gains (morcellement) taxes;
land transfer tax;
is group relief only to the extent that an 'incentive'
company can transfer losses to its parent; and
there are some special arrangements in the sugar
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Mauritius Filing Requirements and Payment of Tax
tax year is from 1st January to 31st December.
There is a self-assessment system, on a previous
year basis; a company must submit its tax return
six months after their financial year end. If
a company's filing date is 31st December, returns
must be submitted two working days prior to that
date. Returns must be accompanied by full payment
of tax due.
Commissioner of Income Tax may issue an assessment
of his own if he disagrees with the company's
assessment. There is an appeal process, winding
up eventually at the Supreme Court.
2007/8 budget introduced an Advance Payment System
(APS) for companies, whereby they are required
to effect quarterly provisional tax payment on
the basis of the chargeable income of the preceding
tax return. Final reconciliation of tax liability
will be done when the annual tax return for that
year is submitted.
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Mauritius Withholding Tax
There are no formal withholding taxes as such
in Mauritius. Dividends, royalties and interest
are chargeable to tax in the hands of resident
companies and individuals. Recipients of dividends
that have been paid out of full rate-taxed income
will not be taxed again. However, anyone making
payments outside Mauritius is deemed to be the
agent of the recipient, and is responsible for
paying over tax that would be due on the payment,
which has the effect of a withholding tax.
from certain types of company (listed companies,
offshore or international companies, and freeport
companies) have various degrees of freedom from
taxation (see Offshore
Legal and Tax Regimes). Interest payments
to non-residents are subject to preferential rates
of tax under Double Tax
Treaties. In practice, tax is generally withheld
on interest payments to non-residents, although
not to residents.
The operation of these Mauritian 'withholding'
taxes that aren't is quite complex; specialist
professional advice is necessary before any action
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