MAURITIUS Law and Practice Contributed by: Johanne Hague, Gaelle Angoh Li Ying Pin, Medina Torabally and Béatrice Phanjoo, CMS Prism in association with CMS
regulations clarifying the scope of application of the QDMTT and computation method are expected to be issued in order to ascertain its precise application. 4.4 Specific Features or Deviations of Pillar Two Regulations with regard to the implementation of QDMTT delineating its scope, computation, adminis - tration and compliance obligations under the ITA 1995 are yet to be issued. 4.5 Digital Services Tax Starting from 1 January 2026, a value-added tax (VAT) of 15% has been introduced on digital and electronic services supplied to a person in Mauritius by a for - eign supplier having no permanent establishment in Mauritius. Digital or electronic services include website supply, web hosting, programs on demand and software sup - ply, amongst others. Pursuant to the VAT Act 1998, a foreign supplier is required to be registered in Mauritius for VAT pur - poses, and where its turnover of taxable supplies exceeds, or is likely to exceed, MUR3 million (or its equivalent in foreign currency), the foreign supplier shall appoint a tax representative having a permanent establishment in Mauritius. 5. Anti-Avoidance and Anti-Evasion Measures 5.1 Definition and Identification of Tax Fraud, Evasion, Tax Avoidance and Abusive Schemes Tax legislation in Mauritius does not provide for a spe - cific definition of tax fraud or tax evasion. While the ITA 1995 does not set out an exhaustive definition of tax avoidance, it lays down that tax avoid - ance includes directly or indirectly: • altering the incidence of income tax; • relieving any person from liability to pay income tax; and
• avoiding, reducing or postponing any liability to pay income tax. General anti-avoidance provisions under the ITA 1995 apply to any transaction entered into or effected that has, or would have had, the effect of conferring a tax benefit on a person and the MRA considers that the transaction was entered into or carried out for the sole and dominant purpose of enabling a taxpayer to obtain a tax benefit, having regard to: • the manner in which the transaction was entered into or carried out; • the form and substance of the transaction; • the result that would have been achieved by the transaction; • any change in the financial position of the relevant taxpayer that has resulted, will result, or may reasonably be expected to result, from the transac - tion; • whether the transaction has created rights or obligations which would not normally be created between persons dealing with each other at arm’s length under a transaction of the kind in question; and • the participation in the transaction of a corporation resident or carrying on business outside Mauritius. The ITA 1995 also provides for targeted anti-avoidance provisions, such as in the following circumstances: • the payment of excessive management fees; • excessive remuneration to shareholders or direc - tors; • the provision of non-dividend benefits to share - holders or relatives of shareholders; or • the retention of rights over income in circumstanc - es where property or income rights are transferred to a relative but the transferor retains control or enjoyment. 5.2 Anti-Avoidance Mechanisms With the aim of deterring tax fraud, the MRA has adopted a significantly higher rate of penalties (50%) than generally imposed on assessments as per the MRA’s SOP on penalties.
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