MAURITIUS Law and Practice Contributed by: Fayaz Hajee Abdoula, Yashna Munbauhal and Yojna Beesoon, BLC Robert & Associates
6.6 The Substance of Non-Local Affiliates There is no applicable information in this jurisdiction. 6.7 The Sale of Shares in Non-Local Affiliates Local corporations are not subject to tax in Mauritius on the gain on the sale of shares in non-local affiliates.
has also made commitments to the OECD to imple - ment transparency and effective exchange of informa - tion for tax purposes. In respect of BEPS Action 5, Mauritius has complied with the recommendations made by the Forum on Harmful Tax Practices regarding the then-preferen - tial regimes prevailing in Mauritius. Since 2019, the deemed foreign tax credit regime, which was avail - able to companies holding a category 1 global busi - ness licence and deemed to be a harmful practice, has been abolished, and the partial exemption regime (as described in 1.4 Tax Rates ) was introduced. To benefit from the partial exemption regime, companies have had to satisfy new prescribed substance require - ments. Furthermore, the tax rate for both domestic companies and global business licence holders has been aligned at 15%. In respect of BEPS Action 6, Mauritius has signed and ratified the Multilateral Convention to implement measures to prevent BEPS in relation to Mauritius’ tax treaties. Mauritius has opted to follow the mandatory provisions of the Multilateral Convention under Arti - cles 6, 7 and 16, and the non-mandatory provisions under Article 17 and Part VI (Arbitration). In respect of BEPS Action 13, Mauritius signed the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports in January 2017 and regulations giving effect to that agreement were proclaimed in 2018. In respect of BEPS Action 14, Mauritius is amending its existing tax treaties, covered under the Multilateral Convention, to cater for the minimum standard for improving dispute resolution under Action 14 (which requires jurisdictions to allow a taxpayer to present a case to the competent authority of either contracting jurisdiction for mutual agreement assistance). In January 2022, the tax authorities reported that synthesised texts are in preparation for most of the double taxation avoidance agreements (to which Mauritius is a party) modified by the Multilateral Con - vention. These synthesised texts will not be legally binding and are being prepared to ease the interpre -
7. Anti-Avoidance Provisions 7.1 Overarching Provisions
The Income Tax Act 1995 contains a general anti- avoidance provision that caters for transactions, operations or schemes that have been set up to avoid tax liability in Mauritius. The specific anti-avoidance provisions to be noted relate to: • interest on debentures issued by reference to shares; • excess of remuneration or share of profits; • excessive remuneration to a shareholder or a direc - tor; • benefit to a shareholder; • excessive management expenses; • leases for purposes other than an adequate rent; and • rights over income retained. The local tax authorities do not have a regular rou - tine audit cycle, but they are empowered under the Income Tax Act 1995 to carry out assessments on taxpayers. The tax assessments are carried out on an ad hoc basis throughout the year. The time limit for the tax authorities to raise a tax assessment is two years immediately preceding the year in which a return is filed. 9. BEPS 9.1 Adoption of BEPS Recommendations Several major changes have already been implement - ed in the context of the BEPS Action Plan. Mauritius 8. Audit Cycles 8.1 Regular Routine Audit Cycle
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