Tax in Mauritius

Tax in Mauritius for companies is based on a fiscal regime that was introduced in 1995 under the Income Tax Act, which is designed to encourage international business in Mauritius.  Taxation is...

Companies in Mauritius

Companies in Mauritius are called Global Business Companies but are classified as Category 1 and Category 2 companies based on the type of license that they hold.  Companies in Mauritius can be...

Mauritius Offshore Trust Formation

Mauritius Offshore Trust Formation: Settlor Mauritius offshore trust formation can be done by anyone who is legally able to settle a trust.  Settlors of offshore trusts in Mauritius are able to be...

Tax in Mauritius

Tax in Mauritius for companies is based on a fiscal regime that was introduced in 1995 under the Income Tax Act, which is designed to encourage international business in Mauritius. Taxation is critical in the development of a country as a haven for asset protection, tax planning and tax minimization.

Structuring a fiscal regime so that it is attractive to foreign investors and people that wish to incorporate is important to Mauritius. Tax rates must be appealing, but Anti-Double Taxation Avoidance Treaties help to provide favorable conditions for Mauritius companies that operate in other countries that signed these agreements with Mauritius. Taxation agreements are hence important and help make international trade and commerce less costly. Tax in Mauritius is central to the island being a jurisdiction of choice for tax planning, investment and entering alternative markets in India and China.

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Tax in Mauritius was changed for category 1 Mauritius companies to a standard 15% tax rate. This provision was introduced in the Income Tax Act of 1995 and sought to provide local businesses with a more leveled playing field with regard to foreign owned companies by way of this flat tax. Mauritius also hoped to offer a tax rate that would make it easier for companies to take advantage of tax treaties signed by Mauritius.

Notwithstanding this 15% tax in Mauritius, category 1 Mauritius companies were able up until 2000 to choose, according to the Finance Act 1998, to pay more than this amount of tax. From 2000 onwards, the 15% Mauritius tax rate was imposed on all companies that were established after July 1, 1998. Mauritius companies that were registered before July 1, 1998 had a Mauritius tax range of 0% to 35%, but providing that they had confirmed being taxed according to this scheme by June 30, 2002 or else would have been subject to the standard 15% tax in Mauritius.

One of the Mauritius tax benefits that the category 1 Mauritius companies have over the category 2, is that they are able to benefit from Mauritius tax treaties with other countries. Since companies holding category 1 licenses are tax resident, they are provided with some degree of tax relief on their international activities from Mauritius tax treaties.

In August 2002, a change was made to the Income Tax Act so that Mauritius companies that were under the Pioneer Financial Services Schemes (authorization had to be given by the FSC). This amendment involved the introduction of a 15% tax for these companies and directed at services such as investment management and advisory, actuarial services, treasury management, pension fund management, asset management and investment counseling for portfolio investments. The Mauritius tax rate for lease financing and equity funds is also an incentive for these activities.

Besides this fiscal regime, Mauritius tax benefits include the absence of withholding tax on dividends earned outside Mauritius, zero withholding tax on interest, zero capital gains, zero inheritance tax on shares acquired in an international company and concessionary income tax rates for specified employees at category 1 Mauritius companies. These employees can be expats or employed at a holding company.

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