United States (US) Foreign Account Tax Compliance Act (FATCA)
On 27 December 2013, the government of the Republic of Mauritius and the government of the United States of America signed an Agreement for the Exchange of Information Relating to Taxes (the Agreement) to set the legal framework to enable exchange of tax information between the two countries. This was followed by the signing of another agreement known as the Inter-Governmental Agreement (Model 1 IGA) to improve international tax compliance and to implement FATCA. Both agreements have been published in the Government Gazette No. 61 of 5 July 2014 as GN 135 of 2014. Both the Agreement and the IGA entered into force on 29 August 2014.
The Agreement provides for exchange of tax information (upon request, spontaneous and automatic) between Mauritius and the United States. The IGA provides for the automatic reporting and exchange of information in relation to accounts held with Mauritius financial institutions by US persons and the reciprocal exchange of information regarding financial accounts held by Mauritius residents in the United States.
The MRA has issued guidance notes (available on MRA’s website) to provide practical assistance to financial institutions, businesses, their advisers, and officials dealing with the application of FATCA.
Corporate Reporting Standards (CRS)
Mauritius signed the Organisation for Economic Co-operation and Development (OECD) Convention on Mutual Administrative Assistance in Tax Matters in June 2015 and, as a member of the Early Adopters Group, the country had initially planned to implement the CRS early. The effective date of 1 January 2016 was subsequently deferred to 1 January 2017, and the first reporting will now start from 31 July 2018.
The Mauritius ITA was amended to enact the CRS, and the MRA is the competent authority to administer the process. Under the CRS, financial institutions (FIs) will need to report accounts held by non-residents to the MRA, which will be used for eventual exchange with other jurisdictions. In line with the OECD commentaries and handbook on the CRS, the MRA published a set of guidance notes in April 2016 (MRA Guidance Notes) to help identify which FIs have reporting obligations as well as set out the type of financial information and accounts that will need to be reported.
Base Erosion and Profit Shifting (BEPS)
As a member of the all-inclusive framework, Mauritius has pledged commitments to implement the BEPS Actions. At an initial stage, all participating countries have to adopt the minimum standards, namely Action 5: Harmful tax practices, Action 6: Treaty abuse, Action 13: CbC reporting, and Action 15: Multilateral instrument (MLI) to implement the treaty measures in the BEPS framework.
Mauritius has already signed off to the MLI on 5 July 2017 by adopting the principal purpose test as a measure to address treaty abuse. As far as Action 5 is concerned, Mauritius has recently been reviewed by the OECD’s Forum of Harmful Tax Practices (FHTP) and the European Union (EU) on its different regimes. Global Business regimes, Freeport, and captive insurance were regarded as being harmful by both the OECD and European Union. Mauritius has already given commitment to address the concerns by 2018.
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 MNE groups beginning on or after 1 July 2018. See Country-by-country (CbC) reporting in the Group taxation section.