Double taxation agreement

Definition

A double taxation agreement (DTA) is a bilateral treaty by which two States agree on how to allocate between them the right to tax the same income and to prevent the same person — individual or corporate — from being taxed twice on that income. It sets out, country by country, which State may tax which type of income (dividends, interest, royalties, business income, etc.) and provides a method for eliminating any residual double taxation, most often exemption or tax credit. A DTA does not create a new tax liability: it limits or allocates those that already exist under each State's domestic law.

Framework in Mauritius

Mauritius has a network of 45 double taxation agreements in force (MRA, 2026), one of the most extensive in the region for a jurisdiction of its size. The administration and application of these agreements fall under the Mauritius Revenue Authority (MRA), the competent authority designated for matters of tax residence, residence certificates and mutual agreement procedures between administrations. For example, the agreement between Mauritius and the United Arab Emirates has been in force since 1 September 2019 on the Emirati side and 1 February 2020 on the Mauritian side. Access to these agreements generally requires the entity to be tax resident in Mauritius: this is the case of a domestic company or a Global Business Licence (GBC), both of which are tax residents and administered through a management company licensed by the Financial Services Commission (FSC). An Authorised Company, by contrast, is not tax resident in Mauritius and has no access to the treaty network.

In practice

Relying on a DTA generally requires establishing tax residence in one of the two contracting States, often by means of a residence certificate issued by the competent administration. The use of an agreement by a Mauritian structure must be examined case by case, depending on the nature of the income concerned, the entity's actual substance and the conditions specific to each treaty. Tax administrations pay close attention to arrangements designed to obtain a treaty benefit without genuine economic activity in the State of residence relied upon; anti-abuse clauses, now common, may restrict access to a treaty's benefits. Each situation therefore deserves individual consideration, subject to eligibility and case-by-case review, rather than assuming an automatic benefit.

Related terms

The double taxation agreement is linked to the concept of tax residence, which determines access to the treaty network, as well as to the status of Global Business Licence (GBC) and Authorised Company, whose tax treatment and access to agreements differ significantly. It also relates to the role of the Mauritius Revenue Authority (MRA) as competent authority, and to that of the management company licensed by the Financial Services Commission (FSC), which administers entities that may rely on it.

Related terms