MAURITIUS Law and Practice Contributed by: Sameer K. Tegally, Sonia Xavier and Ashvan Luckraz, Venture Law
Tax Credit for Small Businesses Small enterprises with an annual turnover not exceed - ing MUR10 million shall be entitled to a tax credit of 5% per annum, for a period of three consecutive years (aggregating to 15%), in respect of capital expenditure incurred on the acquisition of new equipment, up to a maximum of MUR500,000 per year. This incentive shall exclude expenditure on motor vehicles. Any unu - tilised tax credit may be carried forward for a period not exceeding five years. A qualifying small business or service provider is one whose annual turnover does not exceed MUR10 mil - lion and which carries on specified professional or ser - vice activities, including architects, engineers, estate agents, land, marine or motor surveyors, opticians, project managers, property valuers, interior design - ers/decorators and medical, health, wellness and per - sonal care service providers (including hairdressers and barbers). Partial Exemption for Virtual Asset Service Providers (VASPs) Licensed VASPs shall be eligible to claim an 80% partial exemption on income derived from virtual asset-related activities, subject to compliance with prescribed economic substance requirements. Restriction on Exemption for Banks Banks shall no longer be entitled to the 80% par - tial exemption in respect of foreign-source dividend income. 5.4 Tax Consolidation There are no group taxation provisions in the Mauritian tax legislation other than the transfer of losses by tax incentive companies, sugar factory operators, sub - sidiaries in Rodrigues and manufacturing companies upon their takeover. 5.5 Thin Capitalisation Rules and Other Limitations Mauritius does not have specific thin capitalisation legislation; however, it does have other anti-avoidance provisions, as described in the following. If a company has issued debentures to each of its shareholders, subject to the number, nominal value or
person to apply an alternative basis of apportionment for input tax. Local Income Taxes Local income taxes levied by a local administration, such as urban councils, do not exist in Mauritius. Corporate Withholding Taxes (WHTs) There are no withholding taxes (WHTs) in Mauritius for payments made by GBL companies to non-residents not carrying out any business in Mauritius. There is no WHT on dividends received from resident companies or on payments made by a company having an annual turnover of less than MUR6 million. The following WHT rates are applicable to certain other income streams: • interest payable by any persons (other than banks or non-bank deposit-taking institutions operating under the Banking Act) to individuals and non- resident companies – 15%; • royalties payable to (i) residents (10%) and (ii) non- residents (15%); • rent payable to (i) residents (5%) and non-residents (10%); • payments to contractors and subcontractors (0.75%); and • payments to providers of services (accountant/ accounting firm, architect, attorney/solicitor, bar - rister, dentist, doctor, engineer, land surveyor, legal consultant, project manager in the construction industry, quantity surveyor, property valuer, and tax adviser or representative) (3%). 5.3 Available Tax Credits/Incentives Mauritius has a credit system of taxation whereby for - eign 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. No actual foreign tax credit is allowed on foreign- source income derived from a corporation issued with a GBL on or before 16 October 2017, if they have claimed the 80% exemption.
657 CHAMBERS.COM
Powered by FlippingBook