MAURITIUS Law and Practice Contributed by: Sameer Tegally, Sonia Xavier and Ashvan Luckraz, Venture Law
Exportation of Goods Companies engaged in the exportation of goods are liable to be taxed at the rate of 3% on the charge - able income attributable to that export based on a prescribed formula. The benefit of the reduced income tax rate of 3% has been extended to freeport operators and private freeport developers engaged in the retreading of used tyres and the recycling of waste intended for the local market. Partnerships Limited partnerships are tax-transparent and are therefore not taxable under the laws of Mauritius – unless they hold a global business licence (GBL), in which case they can elect to be taxpayers. In a tax- transparent limited partnership, only the partners who are residents of Mauritius are required to pay tax in Mauritius at a rate of 15%, subject to any applicable tax credits or exemptions. Non-resident limited part - ners are only liable for 15% tax on income earned in Mauritius and have no tax obligations on income sourced from a foreign country. Trusts and Foundations Income tax laws distinguish between resident and non-resident trusts and between resident foundations and non-resident foundations. A non-resident trust is a trust of which the settlor and the beneficiaries are not resident in Mauritius or, in the case of a purpose trust, where such purpose is carried out wholly outside Mauritius. Such trusts are not subject to taxation in Mauritius. A foundation will be considered non-resident if the founder is a non-resident and all the beneficiaries specified in the charter or will are non-residents of Mauritius for the entire income year. Non-resident foundations are exempt from taxation in Mauritius. Additionally, non-resident trusts or foundations must submit an annual declaration of “non-residency” to the Mauritius Revenue Authority (MRA). Charitable trusts and foundations in Mauritius are exempt from income tax. In contrast, a non-charita - ble trust, non-charitable foundation, or non-charitable
institution that is considered tax-resident in Mauri - tius is subject to a tax rate of 15% per annum on its chargeable income. However, these entities may qualify for tax credits on foreign taxes paid or receive a partial exemption of 80% on certain specific types of Mauritian tax liabilities. Société Resident société A resident société is not liable to tax. Instead, every associate of the société is liable to tax on his/her share of income, whether distributed or not. Non-resident société A non-resident shall be liable to income tax as if the société were a company and shall pay income tax on its chargeable income at a rate of 15%. Companies Holding a Global Business Licence (GBL) GBL-holding companies are taxed at the normal rate of 15%, except for an income tax exemption of 80%, which applies to: • foreign dividends; • foreign-sourced interest income; • profit attributable to a permanent establishment of a resident company in a foreign company; • foreign-sourced income derived from a collective investment scheme (CIS); • closed-end funds; • CIS managers; • CIS administrators; • investment advisers or asset managers licensed or approved by the FSC; and • income derived from companies engaged in ship and aircraft leasing. Corporate Social Responsibility (CSR) Every year, a company must set up a CSR fund equal to 2% of its chargeable income for the preceding year. Value-Added Tax (VAT) VAT shall be charged at the standard rate of 15% on all taxable goods and services, except certain food items that are zero-rated.
372 CHAMBERS.COM
Powered by FlippingBook