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Mauritius

General Information

Country Name: Mauritius
Currency: Mauritian Rupee (MUR)
Primary Tax Authority: Mauritius Revenue Authority (MRA)
Key Legislation:

  • The Income Tax Act 1995
  • The Value Added Tax Act 1998
  • The Finance Act 2021

Fiscal Authority Allocation

Centralized Fiscal System:
Mauritius operates a centralized fiscal system. All taxes are collected and managed by the Mauritius Revenue Authority (MRA) at the national level. There are no regional or local taxes.

Corporate Income Tax (CIT)

Standard Rate: 15%
Mauritius applies a flat corporate income tax rate of 15%. Resident companies are taxed on their worldwide income, while non-resident companies are taxed only on income sourced from Mauritius.

Corporate Forms and Taxation:

  1. Domestic Companies: Subject to the 15% CIT rate on worldwide income.
  2. Global Business Companies (GBCs): GBCs engaged in international activities are taxed at a preferential rate, often benefiting from partial exemptions on foreign-sourced income.
  3. Authorised Companies: Non-resident entities that conduct business primarily outside Mauritius and are taxed only on Mauritian-sourced income.

Exemptions and Incentives:

  • Partial Exemption Regime: A partial exemption of 80% on certain types of income, such as dividends, interest, and foreign-sourced income, applies to GBCs, reducing the effective tax rate.
  • Freeport Incentives: Companies operating in Freeport zones are exempt from CIT on export-oriented income for an initial period.
  • Investment Tax Credits: Various incentives are available for companies investing in technology, R&D, and renewable energy.

Goods and Services Tax (GST) / Value-Added Tax (VAT)

Standard Rate: 15%
Mauritius imposes VAT at a standard rate of 15% on most goods and services. Reduced rates apply to certain essential items, such as basic foodstuffs and medical services.

Exemptions:
Financial services, education, healthcare, and exports are generally exempt from VAT. Exports are zero-rated, meaning that businesses can recover VAT on inputs related to exported goods.

Personal Income Tax (PIT)

Progressive Rates:
Mauritius applies progressive income tax rates for individuals based on their annual income.

  • Income up to MUR 650,000: 10%
  • Income above MUR 650,001: 15%

Solidarity Levy:
High-income earners (individuals earning over MUR 3 million annually) are subject to an additional Solidarity Levy of 25% on income exceeding this threshold.

Additional Mandatory Contributions

Social Security Contributions:
Both employers and employees are required to contribute to the National Pension Fund (NPF) and National Solidarity Fund (NSF).

  • Employer Contribution: 6% of gross salary to NPF and NSF.
  • Employee Contribution: 3% of gross salary to NPF and NSF.

Self-Employed Contribution: Self-employed individuals contribute 9% of their annual income to the NPF.

Withholding Taxes

  • Dividends: 0% (no withholding tax on dividends paid to both residents and non-residents).
  • Interest: 15%
  • Royalties: 15%
    Mauritius has an extensive network of double taxation agreements (DTAs) that may reduce or eliminate withholding tax rates on cross-border payments.

Transfer Pricing Rules

Mauritius adheres to the OECD guidelines for transfer pricing. Transactions between related parties must be conducted on an arm’s-length basis, and businesses are required to maintain appropriate documentation for such transactions.

Special Tax Regimes

  • Global Business Companies (GBCs): GBCs engaged in cross-border activities can benefit from tax incentives, including the 80% partial exemption regime.
  • Freeport Incentives: Companies operating within Freeport zones are exempt from corporate tax on their export earnings for a period of time, typically up to 10 years.
  • Innovation Box Regime: Income derived from intellectual property is subject to a preferential tax regime, reducing the effective tax rate for qualifying IP income.

Other Taxes

  • Property Transfer Tax: A 5% tax is levied on the transfer of immovable property.
  • Stamp Duty: Stamp duties are imposed on certain legal documents, such as property transactions.
  • Capital Gains Tax: There is no capital gains tax in Mauritius.
  • Customs Duties: Imposed on certain imported goods, but many goods, especially raw materials and capital equipment, are exempt.

Double Taxation Agreements (DTAs)

Mauritius has signed over 45 double taxation agreements with various countries, including major trading partners such as India, France, and the UK. These treaties aim to prevent double taxation and reduce withholding tax rates on dividends, interest, and royalties.

Local Taxes

Mauritius does not impose local or municipal taxes. All tax collection and administration are handled by the national tax authority.

Compliance and Reporting

Annual Filing:
Both companies and individuals must file annual tax returns. The tax year runs from July 1st to June 30th, with returns typically due by September 30th of the following tax year.

Penalties for Late Filing:
Failure to file or pay taxes on time results in penalties and interest charges, which are determined based on the duration and amount of unpaid taxes.

Recent Developments

Tax Reform Initiatives:
Mauritius has been revising its tax policies to remain competitive in the global market while ensuring compliance with international tax standards, such as the OECD’s Base Erosion and Profit Shifting (BEPS) framework.

Digital Economy Taxation:
Mauritius is evaluating the introduction of measures to tax digital services, particularly concerning income derived from online platforms and international digital services providers.

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