MAURITIUS Law and Practice Contributed by: Johanne Hague, Gaelle Angoh Li Ying Pin, Medina Torabally and Béatrice Phanjoo, CMS Prism in association with CMS
2. Territoriality, Residence and Permanent Establishment
not on the courts), except where there is a material difference in the facts. Statements of Practice and guidance Pursuant to Section 159A of the ITA 1995, the MRA issues Statements of Practice (SOPs) on the applica - tion of legal provisions. The MRA also issues commu - niqués and guidance notes to clarify aspects of the tax legislation. SOPs and guidance notes are persuasive in nature and are not binding on a court of law. 1.2 Hierarchy of Sources International tax rules do not apply automatically in Mauritius until they are expressly incorporated and ratified into Mauritian law and operate with the force of law. Matters not governed by an applicable treaty remain subject to domestic tax law. Where both domestic law and an incorporated treaty purport to apply to the same subject matter, the treaty (as implemented in Mauritian law) prevails to the extent of any incon - sistency. 1.3 OECD Model/United Nations Influence on Treaty Practice Mauritius broadly follows the recognised OECD model of taxation, and the tax treaties are generally drafted in compliance with OECD rules. Where the treaties are not modified by the Multilateral Instrument (MLI), the country uses bilateral protocols, for instance with India. 1.4 Multilateral Instrument Mauritius is a signatory to the MLI, which was signed on 5 July 2017 and ratified on 18 October 2019. The MLI entered into force on 1 February 2020. Mauri - tius has listed 44 of its 46 tax treaties as Covered Tax Agreements, which, once modified, incorporate the base erosion and profit shifting (BEPS) minimum standards, with the principal purpose test as the main anti‑abuse provision.
2.1 General Principle of Territorial Taxation For individuals, Mauritius applies a mixed source and remittance regime. Income derived from within Mau - ritius is chargeable regardless of the taxpayer’s resi - dence status, and foreign-source income is charge - able only when remitted to the country by a Mauritian resident. Resident companies are subject to corporate income tax on their worldwide chargeable income at a rate of 15%, subject to any applicable exemption or credits available. Additional taxes may be imposed based on the turnover of the company – see 3.2 Business Profits . All taxes in Mauritius are administered under a unified tax system at the national level. Mauritius does not operate any separate regime for islands other than the main island. 2.2 Tax Residence of Individuals Tax residence of individuals is determined accord - ing to one of the three criteria below, depending on whether an individual: (i) has their domicile in Mauritius, unless their per - manent place of abode is outside Mauritius; (ii) has been present in Mauritius in that income year, for a period of, or an aggregate period of, 183 days or more; or (iii) has been present in Mauritius in that income year and the two preceding income years, for an ag - gregate period of 270 days or more. A person will be considered tax resident in Mauritius in any income year if one of those criteria is met save for (iii) above, in which case tax residence takes effect prospectively as from the third income year. 2.3 Taxation of Resident Individuals An individual who is tax resident in Mauritius is taxed on all Mauritius-source income, other than exempt income, derived by them during the preceding income year. They are taxed on foreign source only if it is remitted to Mauritius.
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