MAURITIUS Law and Practice Contributed by: Sameer Tegally, Sonia Xavier and Ashvan Luckraz, Venture Law
Tax Consolidation Mauritian tax legislation has no group taxation provi - sions other than the transfer of losses by tax-incentive companies, sugar factory operators, subsidiaries in Rodrigues and manufacturing companies upon their takeover. Thin Capitalisation Rules and Other Limitations Mauritius does not have specific thin capitalisation legislation; however, it does have other anti-avoidance provisions. If a company has issued debentures to each of its shareholders, subject to the number, the nominal val - ue, or paid-up value of the shares in that company, any interest paid on debentures and claimed as a deductible expense may be disallowed and treated as a dividend. 9.4 Tax on Sale or Other Dispositions of FDI Mauritius does not impose a tax on capital gains. However, some transactions may be taxed as ordi - nary business profits rather than capital gains. Where a transaction is in the nature of trade, the MRA may view it as an ordinary trading transaction and assess the gains derived as income. Gains realised from the sale of any property or inter - est in property acquired in the course of a business as part of a profit-making undertaking or scheme are There are no controlled foreign company rules under Mauritian tax legislation, and Mauritius has no specific transfer pricing legislation. However, an arm’s-length provision requires transactions between related par - ties to reflect a commercially objective value, which would be the amount charged for the services if the parties were not connected. 10. Employment and Labour 10.1 Employment and Labour Framework In Mauritius, employment relationships are governed by legislation, case law, employment agreements and collective agreements within specific industries. The taxable as ordinary income. 9.5 Anti-Evasion Regimes
dent companies 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 com - panies – 15%. • Royalties payable to: (a) residents – 5%; and (b) non-residents – 10%. • Payments to contractors and subcontractors – 0.75%. • Payments to service providers – 3%. This includes: (a) accountants/accounting firms; (b) architects; (c) attorneys/solicitors; (d) barristers; (a) residents – 10%; and (b) non-residents – 15%. • Rent payable to:
(e) dentists; (f) doctors; (g) engineers;
(h) land surveyors; (i) legal consultants; (j) project managers in the construction industry;
(k) quantity surveyors; (l) property valuers; and (m) tax advisers or representatives.
9.3 Tax Mitigation Strategies Available Tax Credits/Incentives
Mauritius has a credit system of taxation whereby a foreign tax credit is given for any foreign-sourced income declared in Mauritius on which foreign tax of a similar character to Mauritian tax has been imposed. No actual foreign tax credit is allowed on foreign- sourced income derived from a corporation issued with a GBL on or before 16 October 2017 if they have claimed the 80% exemption.
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