Mauritius

Inventory valuation

Inventories should be valued at the lower of historical cost or net realisable value. The last in first out (LIFO) basis of valuation is not allowed for tax purposes.

Conformity is required between book and tax reporting. Where the MRA is not satisfied that the basis of valuation is acceptable (e.g. where the LIFO basis has been applied), it will make such adjustment as it believes is appropriate to determine the profits arising from the business carried on.

Capital gains

There is no tax on capital gains in Mauritius. However, certain transactions are taxed as ordinary business profit instead of capital gains. Where a transaction is in the nature of trade, the MRA may take the view that it is an ordinary trading transaction and assess the gains derived as income.

Gains realised from the sale of any property or interest in property acquired in the course of a business, as part of a profit-making undertaking or scheme, are taxable as ordinary income.

Dividend income

Companies, whether resident or not, are exempt from tax on dividends received from Mauritian resident companies.

Dividend income received from abroad by a company resident in Mauritius is subject to tax at the rate of 15%. The company can claim either:

• the 80% partial exemption on gross amount received or
• credit for any foreign tax withheld, subject to documentary evidence being available. 

Dividend income received from abroad by a company resident in Mauritius (including a GBL) is therefore subject to tax at an effective rate of 3%, subject to meeting prescribed conditions.

Interest income

Interest income received by resident companies (including a GBL) is liable to tax at the rate of 15%. The interest income (excluding bank interest) will qualify for 80% exemption on gross amount received, subject to meeting prescribed conditions. Interest derived by a Collective Investment Scheme or a Closed-End Fund licensed or approved by the FSC will qualify for the 95% tax exemption. 

Interest payable by any person, other than by banks or non-bank deposit-taking institutions under the Banking Act, to any person other than a company resident in Mauritius is subject to withholding tax (WHT) at the rate of 15%. Interest payments by a GBL to a non-resident out of its foreign-source income is exempt from WHT.

Royalty income

Royalty income received locally is subject to tax at the rate of 15%.

Royalty income received from abroad is subject to tax at the rate of 15%. Any tax withheld from abroad will be allowed as a foreign tax credit.

Foreign income

Resident corporations are taxed on their worldwide income, but tax credit and treaty relief is generally available in order to avoid double taxation (see Foreign tax credits in the Tax credits and incentives section for more information).