Offshore Structuring, Tax Emigration

Taxation in Mauritius

Posted on by Franco Cronjé

CORPORATE TAXES

  • MUR imposes corporate taxes on its residents amounting to 15%. Subject to compliance with substance requirements your company holding a global business license may claim a 80% partial tax exemption on certain foreign sourced income. Most notably these include:
    • Foreign interest
    • Foreign dividends
    • Profits of a foreign permanent establishment and many others
  • The 80% partial exemption requires the proof of substance (ESR). The proving of substance  includes the following:
    • Certain minimum full-time employees
    • Should a GBL company be actively trading the following will also be applied:
      • 1x Employee for turnover up to USD 100m
      • 2x Employees for turnover in excess of USD 200m
      • Annual expenses amounting to USD 15 000
    • Such amount received should not have been treated as an allowable deduction in the source country.
  • Should your company or group of companies have an annual turnover in excess of Rs 500 million (+-USD = 12 500 000, ZAR = 219 000 000) will be subject to a levy on its annual gross income of 0.3% for insurance, financial institutions, service providers, property holding companies and 0.1% for all other companies. This is however not applicable to GBL license holders or companies in the tourism sector.
  • There is no taxation in Mauritius on:
    • Dividends;
    • Capital Gains
    • Withholding taxes;
    • Inheritance (estate duties);
    • Alienation of shares;
    • Donations tax; or
    • Wealth tax.

INDIVIDUAL TAXES

  • As is the case with your company the individual tax rate is also 15%. However, as from 2020 the Mauritian government has imposed what they refer to as a solidarity levy. This will increase your effective tax to be closer to 25% instead of the previous 15%
  • To be taxed at these rates you will have to be a Mauritian citizen or you will have to be deemed to be exclusively a resident in this country based on the applicable Double Taxation Agreement between Mauritius and your home country. You know that this will only become applicable one your residence has been confirmed or the DTA prevails.
  • To be deemed to be exclusively resident in Mauritius is fact based and your personal circumstances must be taken into account year by year. You will most probably have to be in the country for more than 6 months with a fixed place of residence.

VALUE ADDED TAXATION (VAT)

  • VAT is levied at 15% on the supply of goods and services. The principle remains that VAT is a consumption based tax and will be levied on goods which is consumed in the country.

Franco Cronjé