There are no group taxation provisions in the Mauritius tax legislation other than the transfer of losses by tax incentive companies, sugar factory operators, subsidiaries located in the Island of Rodrigues, and manufacturing companies upon their take-over (see Net operating losses in the Deductions section for more information).
Mauritius does not have any specific transfer pricing legislation. However, it does contain an arm's-length provision requiring transactions between related parties to reflect a commercially objective value, which would be the amount charged for the services were the parties not connected.
Country-by-country (CbC) reporting
The government of Mauritius enacted the Income Tax (Country-by-Country Reporting) Regulations 2018 on 19 February 2018. These regulations will be effective for the reporting fiscal years of multinational enterprise (MNE) groups beginning on or after 1 July 2018.
The Director General shall use the CbC report for the purpose of:
- assessing high-level transfer pricing risks and other base erosion and profit shifting (BEPS) related risks in Mauritius and the risk of non-compliance by members of an MNE group with applicable transfer pricing rules, and
- economic and statistical analysis, where appropriate.
Any person who fails to comply with any provision of CbC reporting regulations shall commit an offence and shall, on conviction, be liable to a fine not exceeding MUR 5,000 and to imprisonment for a term not exceeding six months.
Mauritius does not have specific thin capitalisation legislation; however, it does have other anti-avoidance provisions as described below:
If a company has issued debentures to each of its shareholders, subject to the number, the nominal value, or paid-up value of the shares in that company, any interest paid on debentures and claimed as a deductible expense may be disallowed and treated as a dividend.
Controlled foreign companies (CFCs)
There are no CFC rules under Mauritius tax legislation.