Mauritius: Domestic Corporate Taxation

In this section:

- Mauritius Scope of Income Tax
- Mauritius Income Tax Rates
- Mauritius Branch or Subsidiary?
- Mauritius Calculation of Taxable Base
- Mauritius Filing Requirements and Payment of Tax
- Mauritius Withholding Tax

• 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 in addition:

The following are some particular types of deduction that are not permitted:

There 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 industry.

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Mauritius Filing Requirements and Payment of Tax

The 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.

The 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.

The 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.

Dividends 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.

NB: The operation of these Mauritian 'withholding' taxes that aren't is quite complex; specialist professional advice is necessary before any action is taken.

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