MAURITIUS Law and Practice Contributed by: Sameer K. Tegally, Sonia Xavier and Ashvan Luckraz, Venture Law
paid-up value of the shares in that company, any inter - est paid on debentures and claimed as a deductible expense may be disallowed and treated as a dividend. 5.6 Transfer Pricing Mauritius does not have any specific transfer pricing legislation. However, it does contain an arm’s-length provision requiring transactions between related par - ties to reflect a commercially objective value, which would be the amount charged for the services were There are no controlled foreign company rules under Mauritian tax legislation. Additionally, the Income Tax Act 1995 provides for certain measures relating to anti-avoidance provisions in relation to interest on debentures issued by reference to shares, excess of remuneration or share of profits, excessive remunera - tion to shareholders or directors, benefit to sharehold - ers and excessive management expenses. 5.8 Tariffs No response has been provided in this jurisdiction. the parties not connected. 5.7 Anti-Evasion Rules Under the Competition Act 2007 (the “Act”), a merger situation is defined as “the bringing together under common ownership and control of two or more enter - prises of which one at least carries its activities, in Mauritius, or through a company incorporated in Mau - ritius”. Whilst there is no statutory obligation for parties to a merger to inform, notify or seek the approval of the Competition Commission of Mauritius (CCM), they are entitled under the Act to voluntarily inform and notify the CCM of a merger situation and to seek the CCM’s guidance as to whether: • the proposed transaction has created, or is likely to create, a merger situation; • the enterprises that are party to the merger situa - tion meet the statutory market share threshold in order to be subject to review by the CCM; and 6. Competition Law 6.1 Merger Control Notification
• the existing or proposed merger situation has resulted in, or is likely to result in, a substantial lessening of competition in Mauritius. Besides voluntary notification, the Act provides that merger situations shall systematically be subject to review by the CCM in any of the following circum - stances: • where all the parties to the merger, following the merger, will together supply or acquire 30% or more of all the goods and services on the market; • where one of the parties to the merger alone and prior to the merger supplies or acquires 30% or more of the goods or services of any description on the market; or • where the CCM has reasonable grounds to believe that the creation of a merger situation has resulted in, or is likely to result in, a substantial lessening of competition within any market for goods and services. Hence, where a merger situation does not fall under the market share thresholds set under the Act and does not lead to a substantial lessening of competi - tion, there is a possibility for enterprises to proceed with the merger without involving the CCM at all. On the other hand, the commissioners of the CCM may take action if they find that the merger results, or is likely to result, in a substantial lessening of competi - tion. This includes the power to require divestments or to block the merger if need be. Although it is not mandatory for merger parties to noti - fy their anticipated merger, merger parties are strongly encouraged to conduct a self-assessment to ascer - tain if it is necessary to apply for such guidance. Busi - nesses considering a merger would be well advised to seek the CCM’s advice and possibly even undergo an investigation before going ahead with the merger, to avoid the costs of subsequently having to reverse the merger. The Act currently provides the possibility for any one of the enterprises that intends to be in a merger situation to apply to the CCM for guidance as to whether the proposed merger situation is likely to result in a substantial lessening of competition within any market for goods or services. An application for
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