Corporate Tax Framework
The corporate income tax in Mauritius is governed by the Income Tax Act 1995 and administered by the Mauritius Revenue Authority (MRA). The standard corporate tax rate is 15%, which applies to all companies resident in Mauritius on their worldwide income, and to non-resident companies on their Mauritius-source income.
The Partial Exemption Regime
The partial exemption regime is the cornerstone of Mauritius's attractiveness for international business. Under Section 12B of the Income Tax Act, a GBC is entitled to an 80% exemption on the following categories of income:
- Foreign dividends — Dividends received from foreign subsidiaries or portfolio investments
- Interest income — Interest from foreign sources
- Royalties and licence fees — From foreign licensees
- Income from services — Fees for services rendered to non-residents
- Foreign PE profits — Profits attributable to a permanent establishment outside Mauritius
Calculation Example
A GBC receives USD 1,000,000 in foreign dividend income. Under the partial exemption: 80% (USD 800,000) is exempt. The remaining 20% (USD 200,000) is taxed at 15% = USD 30,000 tax payable. Effective tax rate: 3%.
Tax Residency
A company is resident in Mauritius for tax purposes if it is incorporated in Mauritius or if its central management and control is exercised in Mauritius. For GBCs, maintaining central management and control in Mauritius is a key substance requirement and also ensures access to DTA benefits.
Sector-Specific Incentives
| Sector / Activity | Incentive |
|---|---|
| Freeport activities | Tax holiday for up to 8 years |
| Manufacturing exports | Reduced rate of 3% |
| Fintech / innovation | 5-year tax holiday under regulatory sandbox |
| Pharmaceutical manufacturing | Investment tax credits |
| Smart city enterprises | 8-year tax holiday |
| Africa-focused shipping | Exemption on shipping income |
Key Tax Features
- No capital gains tax — Gains on disposal of shares and assets are not taxed
- No withholding tax on dividends — Dividends paid to non-resident shareholders are not subject to WHT
- No withholding tax on interest — Interest paid to non-residents bears no WHT
- Foreign tax credit — Credit available for taxes paid in other jurisdictions to avoid double taxation
- Loss carry forward — Tax losses can be carried forward for 5 years
- No thin capitalisation rules — No statutory debt-to-equity limits (transfer pricing rules apply)
Compliance Requirements
- Financial year — Companies can choose their financial year-end (commonly June 30 or December 31)
- Tax return filing — Corporate tax return due within 6 months after year-end
- Advance payment system (APS) — Quarterly advance payments based on estimated tax liability
- Transfer pricing — Arm's length documentation required for related-party transactions exceeding MUR 50 million
- Country-by-country reporting — Required for groups with global revenue exceeding EUR 750 million
Tax Comparison with Other Jurisdictions
| Jurisdiction | Corporate Tax Rate | Capital Gains Tax | WHT on Dividends |
|---|---|---|---|
| Mauritius (GBC) | 3% effective | 0% | 0% |
| Singapore | 17% | 0% | 0% |
| Hong Kong | 16.5% | 0% | 0% |
| Ireland | 12.5% | 33% | 25% |
| Luxembourg | 24.94% | Variable | 15% |
| UAE | 9% | 0% | 0% |
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