Corporate Taxation in Mauritius

The Mauritian tax framework

The Mauritian tax system is administered by the Mauritius Revenue Authority (MRA), the national tax authority responsible for tax collection and compliance monitoring. The legislative framework is based primarily on the Income Tax Act, the Value Added Tax Act and the Financial Services Act.

The fiscal year in Mauritius runs from 1 July to 30 June, although companies may, subject to conditions, adopt a different accounting period. The Mauritian tax system is characterised by its simplicity, predictability and alignment with OECD international standards.

Corporate income tax

All companies registered in Mauritius -- whether a GBC, an Authorised Company or a local company -- are subject to a single tax rate of 15 % on their net profits. This rate applies equally to local-source and foreign-source income at the base level. There is no surcharge or progressive rate for businesses.

Companies are taxed on their net accounting profit, after deduction of operating expenses, depreciation and provisions authorised by law. Tax losses may be carried forward for a maximum of five consecutive financial years.

Note: the 15 % rate positions Mauritius among the most competitive jurisdictions in the world, well below the OECD average (approximately 23 %) and the major European economies.

The partial exemption regime

One of the most attractive tax mechanisms in Mauritius is the partial exemption regime. This mechanism, accessible notably to Global Business Companies (GBCs), allows an eligible company to benefit from an 80 % exemption on certain categories of foreign-source income, thereby reducing the effective tax rate to 3 %.

The eligible income categories include, subject to conditions:

• Foreign-source dividends
• Interest received from sources outside Mauritius
• Intellectual property licensing income
• Capital gains on disposals of participations in foreign companies
• Income from consulting and advisory services provided internationally
• Income from collective investment funds

Eligibility conditions: the benefit of the partial exemption is subject to compliance with economic substance conditions in Mauritius. The company must demonstrate that it is effectively managed and controlled from Mauritius, that it employs qualified personnel locally, and that strategic decisions are made on the territory. These requirements are assessed on a case-by-case basis by the tax authorities and the FSC, depending on the nature of the activity.

Double taxation agreements

Mauritius has signed more than 44 double taxation agreements (DTAs) with countries across all continents, including France, the United Kingdom, India, China, South Africa, Germany, Luxembourg, Singapore and the United Arab Emirates.

These agreements prevent the double taxation of income and offer, depending on the structure and the flows involved, reduced withholding tax rates in partner countries. They constitute an essential lever for international tax planning.

The Tax Residence Certificate (TRC)

To benefit from the advantages of a tax treaty, the company must obtain a Tax Residence Certificate issued by the MRA. This certificate attests to the company's effective tax residence in Mauritius. Obtaining it requires demonstrating that the management and control of the company are effectively exercised from Mauritius, which implies an appropriate level of substance: local office, qualified personnel, board meetings held in Mauritius, and effective decision-making on the territory.

VAT in Mauritius

Value Added Tax (VAT) applies at the standard rate of 15 % on the supply of goods and services in Mauritius. The framework is governed by the Value Added Tax Act.

• Registration threshold: VAT registration is mandatory for any business with annual turnover exceeding MUR 6 million. Voluntary registration is possible below this threshold
• Exempt supplies: financial services, healthcare, education, public transport
• Zero-rated supplies: exports of goods, certain services provided to clients outside Mauritius, supplies to freeport zones
• Returns: VAT returns are filed monthly or quarterly depending on the volume of activity

Other taxes and levies

Beyond corporate tax and VAT, it is important to understand the other components of the Mauritian tax landscape:

• No capital gains tax on securities: the disposal of shares, equity interests or financial instruments does not give rise to any capital gains taxation
• No inheritance tax or gift tax: Mauritius does not levy any tax on inheritances or gratuitous transfers
• No withholding tax on dividends: no withholding tax is levied on dividend distributions, whether the beneficiary is resident or non-resident
• Registration duty: registration duty applicable to real estate transactions and certain legal documents
• Land transfer tax: property transfer tax applicable on the disposal of immovable property in Mauritius
• CSG (Contribution Sociale Generalisee): mandatory social contributions for employers and employees

Filing obligations

Companies operating in Mauritius are subject to a set of reporting obligations:

1. Annual Income Tax Return: annual tax return to be filed with the MRA within six months of the close of the financial year
2. Financial statements: preparation of annual accounts in compliance with IFRS or IFRS for SMEs, audited where applicable -- our accounting and compliance service covers all these obligations
3. Annual Return: annual filing with the Registrar of Companies confirming the company's statutory information
4. CRS and FATCA filings: financial institutions and certain entities are required to report information on non-resident accounts (Common Reporting Standard) and US taxpayers (FATCA)
5. Country-by-Country Reporting (CbCR): multinational groups with consolidated turnover exceeding EUR 750 million are subject to country-by-country reporting obligations
6. VAT returns: monthly or quarterly for VAT-registered businesses

Economic substance and taxation

The question of economic substance is at the heart of the Mauritian tax framework, particularly for GBC companies wishing to access the partial exemption regime and tax treaties. The Mauritian authorities require companies to demonstrate a genuine economic presence on the territory, proportional to the nature and volume of their activities.

In practice, this involves:

• Physical premises in Mauritius suited to the activity
• Qualified personnel employed locally
• Board meetings held in Mauritius with appropriate frequency
• Strategic and operational decisions taken on Mauritian territory
• Accounting records and registers maintained in Mauritius

Compliance with these substance requirements conditions access to tax and treaty benefits. Sunibel Corporate Services supports you in setting up your company in Mauritius and establishing a compliant structure, ensuring that your company meets the substance criteria required for the nature of your activity. Entrepreneurs wishing to establish their tax residency in Mauritius can benefit from comprehensive support.

Summary of rates and obligations