Mauritius

A corporation resident in Mauritius is subject to tax on its worldwide income. A non-resident corporation is liable to tax on any Mauritius-source income, subject to any applicable tax treaty provisions.

Corporations are liable to income tax on their net income, currently at a flat rate of 15%. Companies engaged in the export of goods are liable to be taxed at the rate of 3% on the chargeable income attributable to exports based on a prescribed formula.

Mauritius has a credit system of taxa­tion whereby foreign tax credit is given on any foreign-source income declared in Mauritius on which foreign tax of a similar character to Mauritian tax has been imposed.

All corporate bodies incorporated in Mauritius (except certain approved funds and associations) are subject to income tax. Income derived by local partnerships (resident sociétés) is shared and taxed in the hands of the partners. Foreign corporations carrying on business, or having a place of business, in Mauritius and Authorised Companies are also liable to income tax on income derived from Mauritius.

A société means a société formed under any enactment in Mauritius and includes:

• a société de fait or a société en participation
• a limited partnership
• a joint venture, and
• a société or partnership formed under the law of a foreign country.

Income tax is payable on total net income before distribution at the following rates:

• As of 1 January 2019, GBC1 companies have been renamed as Global Business Licence (GBL) and are liable to tax at the rate of 15%.
• All companies (including GBL companies) will qualify for an 80% tax exemption in relation to certain specified foreign-source income (e.g. foreign dividend not allowed as deduction in source country, interest income, income derived by companies engaged in ship and aircraft leasing, income derived from the leasing and provision of international fibre capacity, interest income derived by a person from money lent through a peer-to-peer lending platform operated under a licence issued by the relevant authority after the five-year tax holiday, income derived from reinsurance and reinsurance brokering activities, income derived from the sale, financing arrangement, and asset management of aircraft and its spare parts, including aviation-related advisory services).
• Tax exemption on interest earned by Collective Investment Schemes (CIS) or Closed End Funds has been increased from 80% to 95%.
• No actual foreign tax credit is allowed on foreign-source income if the company has claimed the 80% exemption.
• Freeport companies (excluding local trading activity) were exempt from tax until 30 June 2021, subject to the Freeport certificate being issued on or before 14 June 2018.

The maximum effective tax rate is 3% for specific income streams; otherwise, the tax rate is 15%. See below grandfathering provisions for GBC1:

• As of 1 January 2019, GBC2 licence has been abolished.
• Companies conducting business and having their place of central management outside of Mauritius will be required to apply for an authorisation to the FSC to be registered as an 'Authorised Company'.
• On 30 June 2021, grandfathered GBC2 licences have lapsed, and companies are required to comply with the prescribed requirements of the FSC.
• An Authorised Company will be treated as a non-resident for tax purposes in Mauritius.
• An Authorised Company is required to file a return of income to the Mauritius Revenue Authority (MRA) within six months of its year-end.
• Transitional period available to GBC2 companies is as follows:

For more information, see the Tax credits and incentives section.

Qualified Domestic Minimum Top-up Tax

There has been the introduction of a Qualified Domestic Minimum Top-up Tax (Article 10 of the GloBE Rules), which is applicable to Mauritius resident companies forming part of a multinational enterprise (MNE) group having a global annual revenue of more than 750 million euros (EUR).

COVID-19 levy

During the COVID-19 period, the government came up with the Wage Assistance Scheme (WAS) to safeguard employment. The COVID-19 levy was subsequently introduced to recoup the whole or part of the WAS from entities that are profitable. No levy was payable if an employer taking the WAS is not liable to tax in the years of assessment 2020/21 and 2021/22.

The levy was applicable for the year of assessment 2020/21 and 2021/22 as follows:

• For a company having an accounting year-end between 1 May 2020 and 31 December 2020, the levy shall be payable in YOA 2020/21.
• For a company having an accounting year-end between 1 January 2021 and 30 April 2021, the levy shall be payable in YOA 2021/22.

The levy was payable to the MRA by the employer in the employer's respective return of income.

Taxation of banks

Banks

Effective from the year of assessment commencing 1 July 2020, banks will no longer be required to submit an auditor’s certificate regarding segmental split of expenses and will be taxed as follows:

• There were some special provisions in respect of the year of assessment 2017/18, the first year of operations, as well as certain prescribed conditions.
• Where chargeable income of the bank is taxed at 5%, no tax credit is allowed on foreign-source income.
• Banks having a chargeable income in excess of the chargeable income for the base year of 2017/2018 will no longer benefit from the reduced tax rate of 5%. Instead, banks are now subject to tax at 5% on their chargeable income on the first Rs1.5bn and 15% on the remainder.
• Special Levy rate has been harmonised to 5.5% of leviable income of banks. The amendment shall be deemed to have come into operation in respect of the accounting period starting on or after 1 July 2023 and every subsequent accounting period.

Corporate Social Responsibility (CSR) Fund

Every year, a company has to set up a CSR Fund equivalent to 2% of its chargeable income of the preceding year.

At least 75% of the CSR Fund set up on or after 1 January 2019 should be remitted to the MRA.

In respect of a CSR Fund set up before 1 January 2019, the remaining amount of the CSR Fund shall be used to implement a CSR Programme in accordance with the company's own CSR Framework. For a CSR Fund set up on or after 1 January 2019, the remaining amount shall be used to implement a CSR Programme or finance a non-governmental organisation implementing a CSR Programme in the following priority areas of intervention, amongst others:

• Dealing with health problems.
• Educational support and training.
• Family protection, including gender-based violence.
• Socio-economic development as a means for poverty alleviation.
• Social housing.
• Supporting persons with severe disabilities.

Any amount unspent (in respect of a CSR Programme) shall be remitted to the MRA together with the company's annual return. The amount to be remitted to the MRA could be reduced upon prior written approval from the National CSR Foundation.

No CSR money shall be spent by a company on the following activities:

• Activities discriminating on the basis of race, place of origin, political opinion, colour, creed, or sex.
• Activities targeting shareholders, senior staff, or their family.
• Activities that are against public safety and national interest.
• Religious, political, trade union, staff welfare and training of employees, and marketing activities.

Where a company is required to submit an Advance Payment System (APS) statement, it should remit 75% of the CSR amount to be remitted to the MRA together with the APS statements, and the final 25% is to be remitted on the submission of the final return.

Local income taxes

Local income taxes levied by local administration, such as urban councils, do not exist in Mauritius.