MAURITIUS Law and Practice Contributed by: Johanne Hague, Gaelle Angoh Li Ying Pin, Medina Torabally and Béatrice Phanjoo, CMS Prism in association with CMS
A foundation, on the other hand, is deemed resident: • where it is registered in Mauritius; or • where it has its central management and control in Mauritius. Pursuant to the MRA’s SOP 24/21 on trusts and foun - dations, a trust or foundation set up in Mauritius is treated as non-resident if it is centrally managed and controlled outside Mauritius. Central management and control is determined as follows: • For trusts: (a) the trust is administered in Mauritius and a majority of the trustees are resident in Mauri - tius; (b) 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 (c) a majority of the beneficiaries or class of ben - eficiaries appointed under the terms of the trust are resident in Mauritius. • For foundations: (a) the founder is resident in Mauritius; and (b) a majority of the beneficiaries appointed under the terms of a charter are resident in Mauritius. 2.6 Definition of Permanent Establishment The ITA 1995 only defines a permanent establishment for the purposes of the qualified domestic minimum top-up tax (QDMTT) provisions, which are duly aligned with the OECD Model Tax Convention on Income and on Capital, as: • (a) a place of business situated in a jurisdiction and treated as a permanent establishment in accord - ance with an applicable tax treaty in force, provid - ed that such jurisdiction taxes the income attribut - able to it in accordance with a provision similar to Article 7 of the OECD Model Tax Convention; • (b) if there is no applicable tax treaty in force, a place of business in respect of which a jurisdiction taxes under its domestic law the income attrib - utable to such place of business on a net basis similar to the manner in which it taxes its own tax residents;
• (c) if a jurisdiction has no corporate income tax system, a place of business situated in that juris - diction that would be treated as a permanent establishment in accordance with the OECD Model Tax Convention provided that such jurisdiction would have had the right to tax the income attrib - utable to it in accordance with Article 7 of that Convention; or • (d) a place of business that is not already described in paragraphs (a) to (c) above through which opera - tions are conducted outside the jurisdiction where the entity is located provided that such jurisdiction exempts the income attributable to such opera - tions. Although the ITA 1995 does not contain a general defi - nition of permanent establishment beyond the QDMTT provisions as provided above, the MRA would typical - ly rely on Section 74 of the ITA 1995 to assert whether a foreign company has a taxable presence where it is carrying on business wholly or partly in Mauritius. From a treaty perspective, most treaties generally define a permanent establishment as “a fixed place of business through which the business of the enter - prise is wholly or partly carried on”. The definition is further typically supplemented by an enumerated, non‑exhaustive list of inclusions. For instance, the Mauritius–South Africa treaty, under Article 5, provides that permanent establishment includes, inter alia, a place of management, branch, office, factory, work - shop, or site of natural‑resource extraction, and the same is followed by express exclusions for activities such as use of facilities solely for the purpose of stor - age, display or delivery of goods. 3. Taxation of Cross-Border Income 3.1 Income From Immovable Property Rental income from immovable property located in Mauritius is deemed to be Mauritius-source income and is subject to income tax regardless of whether it is received by a resident or a non-resident. Rental income paid by any person other than an individual is also subject to Tax Deduction at Source
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