MAURITIUS Law and Practice Contributed by: Bhavna Ramsurun, Pinki Mahata, Lorna Senivassen and Shreya Mungur, BLC Robert & Associates
There is no withholding tax on dividends dis - tributed by a company to its shareholders. Fur - thermore, any interest paid to a non-resident not carrying out any business in Mauritius by a com - pany holding a GBL will be exempt from with - holding tax to the extent that the interest is paid out of the fund’s foreign source income. There is no tax applicable to capital gains in Mauritius. Limited Partnerships A fund structured as a limited partnership will be tax transparent, unless it also holds a GBL – in which case, it can elect to be tax opaque and the tax treatment will be similar to that of a company. Funds structured as limited partner - ships that have elected to be tax transparent will not be taxable in Mauritius (but may be subject to a corporate climate responsibility levy of 2%) if they qualify as a resident société under the ITA; instead, their partners are liable to income tax on their share of income. A limited partner - ship will meet the criteria of a resident société as understood under the ITA when the seat of the limited partnership is in Mauritius and the limited partnership has at least one partner resident in Mauritius. Tax-opaque entities are entitled to benefit from the various tax treaties that Mauritius has with other countries. The above-mentioned tax considerations would be applicable to a fund established as a CIS and to a CEF. There is no withholding tax on the following pay - ments by a fund established as a company or as a limited partnership: • distribution by the fund to its resident and non-resident investors;
• in respect of a fund holding a GBL, interest paid to non-residents out of the fund’s foreign source income; or • interest paid to a company resident in Mauri - tius. Special Purpose Funds In line with the ITA, a special purpose fund is a tax-exempt vehicle under Mauritian law. Any interest, rents, royalties, compensation and oth - er amounts paid to a non-resident by a special purpose fund established under the Financial Services Act 2007 will also be exempt from Mau - ritian income tax. Non-Resident Investors An investor who is not tax resident in Mauritius and who does not otherwise derive any income from Mauritius is not required to pay any tax in Mauritius, whether in respect of income or gains (including distributions) received from a fund, its worldwide income or otherwise. Such an inves - tor is not required to make any tax filing in Mau - ritius. In respect of limited partnership funds, insofar as the fund derives foreign source income, the partners who are not tax resident in Mauritius will not be subject to tax by reason of being a partner in the fund. Partners who are tax resident in Mauritius will be subject to tax in Mauritius, as set out further in “Resident Investors”. Where a non-resident investor derives Mauritian source income, the investor will be required to file an income tax return in Mauritius. Resident Investors An investor who is tax resident in Mauritius will be liable to income tax as follows: • at the rate of 15% for a body corporate; or
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