MAURITIUS Law and Practice Contributed by: Johanne Hague, Ashwin Mudhoo, Medina Torabally and Yushrah Bayjou, CMS Prism – in association with CMS
This means that a trust or a foundation (other than a charitable trust or foundation) would typically be sub - ject to tax at the headline rate of 15% on its world - wide chargeable income. A partial exemption regime is applicable to specific types of income such as foreign dividends or interest income (subject to sub - stance requirements being met). As from the year of assessment starting on 1 July 2024, trusts or foundations having a turnover above MUR50 million are subject to a 2% corporate climate responsibility levy. Starting on 1 July 2025, companies with annual sup - plies and chargeable income over MUR24 million are also required to pay a Fair Share Contribution. Non- banking companies will contribute 5% or 2% of their chargeable income, based on their tax rate. However, global business entities (which includes foundations and trusts), companies that benefit from tax holidays, and entities deriving income that is exempt from income tax are exempt from the payment of the Fair Share Contribution. According to the 2026–2027 Budget, annual supplies exceeding MUR24 million or VAT registration will no longer be a requirement to determine one’s liability to the Fair Share Contribution. The requirement of chargeable income exceeding MUR24 million in an accounting year will still be applicable. This proposed measure is subject to parliamentary debates, which may lead to amendments prior to being included in the Finance Act 2026 and the rel - evant legislation amended. Tax Residency Whether a trust or a foundation falls within the Mau - ritius tax net ultimately depends on whether it is tax- resident in Mauritius. A trust is resident if it is administered in Mauritius and a majority of the trustees are resident in Mauritius, or if the settlor of the trust was resident at the time the instrument creating the trust was executed. A founda - tion is considered to be resident if it is registered in Mauritius or has its central management and control in Mauritius.
However, under the published Mauritius Revenue Authority Statement of Practice, a trust or founda - tion set up in Mauritius is treated as non-resident if it is centrally managed and controlled (CMC) outside Mauritius. Trusts Under the Statement of Practice, a trust will be treated as being CMC in Mauritius if: • the trust is administered in Mauritius and a majority of the trustees are resident in Mauritius; • the settlor of the trust was resident in Mauritius at the time the instrument creating the trust was executed or at such time as the settlor adds new property to the trust; and • a majority of the beneficiaries or class of benefi - ciaries appointed under the terms of the trust are resident in Mauritius. Foundations Similarly, a foundation will be treated as being CMC in Mauritius if: • the founder is resident in Mauritius; and • a majority of the beneficiaries appointed under the terms of a charter are resident in Mauritius. Therefore, a trust or a foundation will be deemed to be non-resident if it does not meet the criteria for being CMC in Mauritius. A non-resident trust or foundation will be subject to source-based taxation only – ie, only on income derived from Mauritius. A Mauritius-resident beneficiary of a resident trust or a foundation is exempt from income tax on any distribu - tions (which are treated as dividends). 1.2 Exemptions There is no inheritance, succession, estate, donation or gift tax in Mauritius. Property transferred to the heirs of an individual is exempt from any land transfer tax and registration duty. 1.3 Income Tax Planning There is scope for using vehicles for efficient income tax planning in Mauritius. Trusts and foundations can be used as vehicles for investment purposes; benefi -
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