MAURITIUS Law and Practice Contributed by: Fazil Hossenkhan, Nafiisah Jeehoo, Kelly Li and Alicia Kwan Pang, Bowmans
An investor who is tax-resident in Mauritius will be liable to income tax as follows: • if the investor is a body corporate, at the rate of 15%; or • if the investor is an individual, income will be taxed according to the following bands – (a) first MUR500,000 of chargeable income: 0%; (b) next MUR500,000: 10%; and (c) remainder: 20%. A tax-resident investor that is a body corporate will be entitled to either: • foreign tax credits; or • an exemption of 80% on tax paid on the following types of income, which are typically received from AIFs – (a) a foreign-source dividend, provided that the dividend is not allowed as a tax-deductible item in the source country and the investor sat - isfies the conditions relating to the substance of its activities as prescribed; (b) interest income, provided that the investor sat - isfies the conditions relating to the substance of its activities as prescribed. A tax-resident investor who is an individual will be entitled to the following: • foreign tax credit; • to deduct the appropriate amount of the income exemption threshold that is applicable to the inves - tor from their net income in each income year; and • to any other reliefs, allowances and deductions as applicable to them. Any dividend income received or capital gains made by any Mauritian investor from a fund established as a company in Mauritius is exempt from income tax. A tax-resident investor that is a body corporate may also be liable to pay the CCR Levy, Fair Share Contri - bution and QDMTT where the applicable thresholds and prescribed conditions are satisfied. A tax-resident investor who is an individual may also be liable to pay a Fair Share Contribution if the leviable
income of such investor exceeds MUR12 million in an income year. The Fair Share Contribution for individu - als is calculated at a rate of 15% on the portion of leviable income above MUR12 million. 4.9 Double Tax Treaties A fund which is tax-resident in Mauritius is entitled to benefit from double tax treaties to which Mauritius is a party. This includes companies incorporated in Mauritius, and limited partnerships which hold global business licences and have elected to be treated as a company for tax purposes. So far, Mauritius has concluded 46 tax treaties and is party to a series of treaties under negotiation. 4.10 Foreign Account Tax Compliance Act (FATCA)/Common Reporting Standard (CRS) Compliance Regime FATCA Compliance Mauritius has signed a Model 1 (a) (non-reciprocal) inter-governmental agreement with the United States to give effect to the FATCA, which came into force in 2014 (the “Mauritius IGA”). Mauritius issued the Agreement for Exchange of Information in Relation to Taxes (United States of America – FATCA Implementa - tion) Regulations 2014 to give effect to that IGA (the “FATCA Regulations”). The Mauritius IGA requires that withholding tax of 30% be applied to payments of cer - tain US-sourced income, such as interests, dividends and insurance to investors in certain circumstances (such as non-compliance by the reporting financial institution with its obligations under the Mauritius IGA, which includes failure to disclose substantial US own - ers or certify that no substantial US owners exist). Following the Mauritius IGA, Mauritius-based financial institutions will not be subject to the 30% withholding tax on US-sourced income if they comply with the requirements of the FATCA. CRS Compliance The Republic of Mauritius has also committed, along with around 100 other countries, to the implemen - tation of the CRS. To enable the implementation of the CRS, the Income Tax Act 1995 of Mauritius has been amended accordingly. Financial institutions in Mauritius have to report annually to the Mauritius Rev - enue Authority on the financial accounts held by non-
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