MAURITIUS Law and Practice Contributed by: Sameer Tegally, Sonia Xavier and Ashvan Luckraz, Venture Law
A person who makes taxable supplies in the course of their business and whose annual turnover exceeds or is likely to exceed MUR3 million is required to register for VAT on a compulsory basis. Additionally, certain service providers (eg, account - ants and auditors, attorneys and solicitors, consult - ants, surveyors, valuers) must be VAT-registered irre - spective of their turnover. A person may also be subject to a reverse charge of VAT with respect to the supply of services in Mauritius. A reverse mechanism where the local recipient of a service, rather than the foreign supplier, is responsi - ble for reporting and paying VAT. This ensures VAT is collected on services imported from abroad, espe - cially when the foreign supplier is not registered for VAT locally. The reverse charge provision on the supply of services received from abroad applies only if: • the taxable supply performed or utilised in Mauri - tius is made by a person who does not belong in Mauritius and is not VAT registered; and • the recipient of the supply is a VAT-registered per - son. Where a VAT-registered person is engaged in a pro - ject spanning several years and the MRA is of the opinion that the apportionment of input tax between taxable supplies and exempt supplies on a prorated basis is not appropriate, it may require the registered person to apply an alternative basis of apportionment for input tax. Local Income Taxes Local income taxes levied by a local administration, such as urban councils, do not exist in Mauritius. Corporate Withholding Taxes There are no withholding taxes (WHTs) in Mauritius on payments made by GBL companies to non-residents who do not carry out any business in Mauritius. There is no WHT on dividends received from resident com - panies or on payments made by a company having an annual turnover of less than MUR6 million.
The following withholding tax rates are applicable to certain other income streams: • interest payable by any persons (other than banks or non-bank deposit-taking institutions operating under the Banking Act) to individuals and non- resident companies – 15%; • royalties payable to (i) residents – 10%, and (ii) non-residents – 15%; • rent payable to (i) residents – 5%, and (ii) non-resi - dents – 10%; • payments to contractors and subcontractors – 0.75%; and • payments to providers of services (accountant/ accounting firm, architect, attorney/solicitor, bar - rister, dentist, doctor, engineer, land surveyor, legal consultant, project manager in the construction industry, quantity surveyor, property valuer, and tax adviser or representative) – 3%. Transfer Pricing Mauritius does not have any specific transfer pricing legislation. However, it does contain an arm’s-length provision requiring transactions between related par - ties to reflect a commercially objective value, which would be the amount charged for the services were the parties not connected. Anti-Evasion Rules There are no controlled foreign companies rules under Mauritian tax legislation. Additionally, the Income Tax Act 1995 provides for cer - tain measures relating to anti-avoidance provisions in relation to interest on debentures issued by reference to shares, excess of remuneration or share of profits, excessive remuneration to shareholders or directors, benefits to shareholders and excessive management expenses. 9.2 Withholding Taxes on Dividends, Interest, Etc Corporate Withholding Taxes There are no withholding taxes (WHTs) in Mauritius on payments made by GBL-holding companies to non- residents who do not carry out any business in Mauri - tius. There is no WHT on dividends received from resi -
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