1 PRE-ENTRY TAX PLANNING
1.1 In Mauritius, what pre-entry estate and gift tax planning can be undertaken?
There are no inheritance/estate or gift taxes in Mauritius.
1.2 In Mauritius, what pre-entry income tax planning can be undertaken?
Tax on income in Mauritius is charged at a flat rate of 15%. Under the current tax regime, non-residents are generally taxed only on their Mauritius-source income while residents, on the other hand, are liable to income tax on their Mauritius-source income and any foreign-source income which is remitted to Mauritius.
Resident individuals are further entitled to an income exemption threshold which can be deducted from their chargeable income.
Any foreign taxes incurred by a resident on its foreign-source income may be credited against any income tax payable in Mauritius in respect of that income (upon submission of written evidence of the foreign tax suffered, where applicable). Notwithstanding the above, resident entities holding a category 1 global business licence, in the absence of evidence of any foreign tax suffered, is entitled to claim 80% of the Mauritius tax payable as a deemed foreign tax credit in law.
Additionally, a resident is also entitled to relief from double taxation under the extensive network of double tax treaties (DTAs) Mauritius has with other countries.
Taking into account the above, non-citizens should engage in careful tax planning prior to entering Mauritius, with a view to limiting their exposure to income tax once they become resident in Mauritius for tax purposes.
1.3 In Mauritius, can pre-entry planning be undertaken for any other taxes?
Apart from income tax, the following other taxes, duties or other charges are payable in Mauritius:
- Value Added Tax (VAT): charged at the rate of 15% on the supply of most goods and services (unless zero-rated or exempted);
- Property Tax: though a general (property) rate collected by local government on buildings and land in Mauritius (where applicable);
- Land Transfer Tax: on the acquisition, transfer or other disposition of immoveable property in Mauritius;
- Registration and Stamp Duties: on formal written agreements witnessing a transaction;
- Customs and Excise Duties: on all dutiable goods imported into Mauritius;
- National Pensions Fund (NPF) Contributions: compulsory pension contributions under the national pension scheme, with employees contributing 3% of their income (subject to a ceiling) and employers contributing 6% of such employees income to the National Pensions Fund; and
- Contributions on Account of Corporate Social Responsibility: requiring profitable companies to contribute 2% of their profits on government-approved corporate social responsibility schemes, or alternatively transfer such profits directly to the government to be used in the fight against poverty.
As such, no form of pre-entry planning can be undertaken for such other taxes, duties or other charges. There are, otherwise, no capital gains taxes, inheritance/estate taxes, wealth taxes, or withholding taxes as such payable in Mauritius.
2 CONNECTION FACTORS
2.1 To what extent is domicile relevant in determining liability to taxation in Mauritius?
Domicile is one of the three criteria used under the Income Tax Act 1995 to determine an individual's residence in Mauritius for tax purposes. See question 2.4 below.
2.2 If domicile is relevant, how is it defined for taxation purposes?
Domicile is not specifically defined under Mauritian law but will be construed, in accordance with Section 73 of the Income Tax Act 1995, as an individual's permanent place of abode. See question 2.4 below.
2.3 To what extent is residence relevant in determining liability to taxation in Mauritius?
The liability of individuals, companies or other taxable business structures for payment of tax under Mauritius law is based on residence.
2.4 If residence is relevant, how is it defined for taxation purposes?
Section 73 of the Income Tax Act 1995, defines residence as follows:
"73. Definition of residence
For the purposes of this Act, "resident", in respect of an income year, when applied to -
- an individual, means a person who -
- has his domicile in Mauritius unless his permanent place of abode is outside Mauritius;
- has been present in Mauritius in that income year, for a period of, or an aggregate period of, 183 days or more; or
- has been present in Mauritius in that income year and the 2
preceding income years, for an aggregate period of 270 days or
more;
- a company, means a company which -
- is incorporated in Mauritius; or
- has its central management and control in Mauritius;
- a societe -
- means a societe which has its seat or siege in Mauritius; and
- includes a societe which has at least one associate or associe
or gerant resident in Mauritius;
- a trust, means a trust -
- where the trust is administered in Mauritius and a majority of the trustees are resident in Mauritius; or
- where the settlor of the trust was resident in Mauritius at the
time the instrument creating the trust was executed;
- any other association or body of persons, means an association or body of persons which is managed or administered in Mauritius."
2.5 To what extent is nationality relevant in determining liability to taxation in Mauritius?
Nationality is not relevant in determining liability to taxation in Mauritius.
2.6 If nationality is relevant, how is it defined for taxation purposes?
This is not relevant to Mauritius.
3 GENERAL TAXATION REGIME
3.1 What gift or estate taxes apply that are relevant to persons becoming established in Mauritius?
There are no gift or estate taxes under Mauritian law.
3.2 How and to what extent are persons who become established in Mauritius liable to income tax?
As set out under question 1.2 above, persons who become resident in Mauritius for tax purposes shall be liable to income tax at the rate of 15% on their Mauritius-source income and any foreign-source income which is remitted to Mauritius.
Residents are entitled to an income exemption threshold which can be deducted from their chargeable income.
Additionally, any foreign taxes incurred by a resident on its foreign-source income may be credited against any income tax payable in Mauritius in respect of that income (upon submission of written evidence of the foreign tax suffered, where applicable).
A resident shall also be entitled to relief from double taxation under the extensive network of double tax treaties (DTAs) Mauritius has with other countries.
3.3 What other direct taxes (if any) apply to persons who become established in Mauritius?
Income Tax is the main form of direct tax in Mauritius. Other forms of direct taxes, duties and/or charges payable in Mauritius are:
- Property Tax: though a general (property) rate collected by local government on buildings and land in Mauritius (where applicable);
- Land Transfer Tax: on the acquisition, transfer or other disposition of immoveable property in Mauritius;
- National Pensions Fund (NPF) Contributions: compulsory pension contributions under the national pension scheme, with employees contributing 3% of their income (subject to a ceiling) and employers contributing 6% of such employees income to the National Pensions Fund; and
- Contributions on Account of Corporate Social Responsibility: requiring profitable companies to contribute 2% of their profits on government-approved corporate social responsibility schemes, or alternatively transfer such profits directly to the government to be used in the fight against poverty.
There are no capital gains taxes in Mauritius.
3.4 What indirect taxes (sales taxes/VAT and customs & excise duties) apply to persons becoming established in Mauritius?
- Value Added Tax (VAT): charged at the rate of 15% on most goods and services (unless zero-rated or exempted) at the time they are imported and/or supplied into Mauritius pursuant to the Value Added Tax Act 1998. VAT at importation is levied on the customs value of the goods and, where applicable, the custom and excise duty payable thereon.
- Registration and Stamp Duties: generally levied on instruments witnessing property and mortgage transactions and/or other formal written agreements witnessing a transaction as prescribed under the Registration Duty Act. The rates of registration and stamp duties applicable to any such instruments or other agreements are generally that in force in the Registration Duty Act at the time any such instruments or other agreements are entered into.
- Customs and Excise Duties: on all dutiable
goods imported into Mauritius in accordance with the Customs Act
1998, Excise Duty Act 1994, Custom Tariff Act 1969 and regulations
made thereunder. The rate of duty, taxes or charges applicable to
any dutiable goods is generally that in force in the Customs Tariff
Act 1969 at the time any bill of entry is validated at customs.
Notwithstanding the above (subject to provisos), any person
being:
- a non-citizen taking up permanent residence in Mauritius;
- a citizen of Mauritius returning for good to Mauritius; or
- any non-citizen holding a valid occupation or work
permit,
3.5 Are there any anti-avoidance taxation provisions that apply to the offshore arrangements of persons who have become established in Mauritius?
Under Mauritius law, resident entities or persons who have suffered taxes on their foreign-source income:
- are entitled to relief from such taxes under the DTAs Mauritius has in place with other countries provided that they are resident in Mauritius for tax purposes;
- where taxes have been incurred by a resident entity or corporation in a country that has not concluded a DTA with Mauritius, such foreign taxes can be credited against income tax payable in Mauritius in respect of that income in accordance with Mauritius law (upon submission of written evidence of foreign tax suffered, where applicable); and
- notwithstanding the above, resident entities holding a category 1 global business licence, in the absence of evidence of any foreign tax suffered, is entitled to claim 80% of the Mauritius tax payable as a deemed foreign tax credit in law.
4 TAXATION ISSUES ON INWARD INVESTMENT
4.1 What liabilities are there to direct taxes on the remittance of assets or funds into Mauritius?
Assets or funds remitted to Mauritius and forming part of the chargeable income of any individual, company or other taxable business structure (where resident or non-resident) shall be liable to income tax in Mauritius in the hands of such residents or non-residents, where applicable.
As set out under question 1.2 above:
- Any foreign taxes incurred by a resident on such assets and funds may be credited against any income tax payable in Mauritius in respect of such assets and funds (upon submission of written evidence of the foreign tax suffered, where applicable). Notwithstanding the above, resident entities holding a category 1 global business licence, in the absence of evidence of any foreign tax suffered, shall be entitled to claim 80% of the Mauritius tax payable on such assets and funds as a deemed foreign tax credit in law.
- Additionally, a resident is also entitled to relief from double taxation with respect to such assets and funds, under the extensive network of DTAs Mauritius has with other countries.
4.2 What taxes are there on the importation of assets into Mauritius, including excise taxes?
As set our under question 3.4 above, the following taxes will apply on the importation and/or supply of goods and services into Mauritius:
- Value Added Tax (VAT) is charged at the rate of 15% on most goods and services (unless zero-rated or exempted) at the time they are imported and/or supplied into Mauritius pursuant to the Value Added Tax Act 1998. VAT at importation is generally levied on the customs value of the goods and, where applicable, the custom and excise duty payable thereon.
- Customs and Excise Duties are also charged on
all dutiable goods imported into Mauritius in accordance with the
Customs Act 1998, Excise Duty Act 1994, Custom Tariff Act 1969 and
regulations made thereunder. The rate of duty, taxes or charges
applicable to any dutiable goods is generally that in force in the
Customs Tariff Act 1969 at the time any bill of entry is validated
at customs. Notwithstanding the above (subject to provisos), any
person being:
- a non-citizen taking up permanent residence in Mauritius;
- a citizen of Mauritius returning for good to Mauritius; or
- any non-citizen holding a valid occupation or work permit,
may clear all his household goods and personal effects, including furniture and electrical appliances, without payment of duty. Eligible citizens of Mauritius returning for good to Mauritius are also allowed to import either a motor vehicle or a motor cycle at a concessionary rate of duty.
4.3 Are there any particular tax issues in relation to the purchase of residential properties?
Please note that the acquisition, transfer or other disposition of immoveable property in Mauritius by non-citizens is subject to restrictions under the Non-Citizens (Property Restrictions) Act, requiring non-citizens to seek and obtain the prior authorisation of the Prime Minister's Office before acquiring/holding immoveable property in Mauritius.
Exceptions to the above rule are acquisitions:
- by inheritance (subject to certain provisos);
- through marriage (subject to certain provisos);
- under the Integrated Resort Scheme (luxury villas); and
- under the Real Estate Development Scheme.
Generally, in relation to the purchase of residential property in Mauritius:
- Land Transfer Tax shall be payable on the acquisition, transfer or other disposition of any immoveable property in Mauritius; and
- Registration and Stamp Duties shall also be levied with respect to instruments witnessing property and mortgage transactions. The rates of registration and stamp duties applicable in such instances shall be that in force in the Registration Duty Act at the time any such instruments are entered into.
Once any immoveable property is acquired, holders of such property may be further liable to:
- Property taxes, though a general (property) rate collected by local government on buildings and land in Mauritius (where applicable).
5 SUCCESSION PLANNING
5.1 What are the relevant private international law (conflict of law) rules on succession and wills, including tests of essential validity and formal validity in Mauritius?
The Hague Convention of 5 October 1961 on the Conflicts of Laws Relating to the Form of Testamentary Dispositions (the 1961 Convention) was extended to Mauritius (then a British Colony) by the United Kingdom of Great Britain and Northern Ireland on 21 December 1965. By a note dated 12 August 1970 and received on 24 August 1970, the Government of Mauritius informed the Ministry of Foreign Affairs of the Kingdom of the Netherlands that it considers itself bound by the 1961 Convention. The date of entry into force of the 1961 Convention is the date of independence of Mauritius; i.e.,12 March 1968.
Mauritius, on the other hand, is not a party to the Hague Convention of 1 August 1989 on the Law Applicable to Succession to the Estates of Deceased Persons.
On all matters of succession, Mauritius will apply the conflict of law rules derived from French case law in such instances as follows:
- The disposition of immoveable property will be governed by the law where the property is located (lex rei sitae).
- The disposition of moveable property will be governed by the laws of the last country of permanent residence of a deceased (lex domicilii) (unless it is determined that such a disposition was done with the view to evade mandatory provisions of Mauritius especially if it directly or indirectly relates to immoveable property in Mauritius).
- Additionally, any restrictions on inheritance of a noncitizen's property in his country of domicile may be reciprocated in Mauritius in virtue of the provisions of the Civil Code which stipulates inter alia that a non-citizen shall enjoy the same rights in Mauritius as those which are or may be granted to Mauritian citizens by international conventions entered into with the state of the said non-citizen.
5.2 Are there particular rules that apply to real estate held in Mauritius or elsewhere?
Any disposition of immoveable property located in Mauritius will be mandatorily determined in accordance with Mauritian law and is subject to restrictions under the Non-Citizens (Property Restrictions) Act, requiring non-citizens to seek and obtain the prior authorisation of the Prime Minister's Office before acquiring/holding immoveable property in Mauritius. Exceptions to the above rule are acquisition:
- by inheritance (subject to certain provisos);
- through marriage (subject to certain provisos);
- under the Integrated Resort Scheme (luxury villas); and
- under the Real Estate Development Scheme.
Additionally, any restrictions on inheritance of a non-citizen's property (including immoveable property) in his country of domicile may be reciprocated in Mauritius in virtue of the provisions of the Civil Code which stipulates inter alia that a noncitizen shall enjoy the same rights in Mauritius as those which are or may be granted to Mauritian citizens by international conventions entered into with the State of the said non-citizen.
6 TRUSTS AND FOUNDATIONS
6.1 Are trusts recognised in Mauritius?
Trusts are recognised under the laws of Mauritius in virtue of the Trusts Act 2001.
6.2 If trusts are recognised in Mauritius, how are they taxed in Mauritius?
A trust will be liable to income tax at the rate of 15% on its chargeable income, if it is deemed resident in Mauritius for tax purposes.
A trust is resident where:
- it is administered in Mauritius and a majority of the trustees are resident in Mauritius; or
- the settlor of the trust was resident in Mauritius at the time the instrument creating the trust was executed.
However, where the settlor of the trust is a non-resident or holds a global business licence, or all the beneficiaries of the trust hold global business licences, the trust can elect to be non-resident by filing the declaration prescribed in law with the relevant regulatory authorites. Otherwise it will be a resident trust for tax purposes.
A resident trust which has suffered taxes on its foreign-source income is entitled to relief from such taxes under the Foreign Tax Credit Regulations (upon submission of written evidence of foreign tax suffered) or, where applicable, the DTAs Mauritius has in place with other countries. In the case of a trust holding category 1 global business licence, in the absence of evidence of the foreign tax suffered, the trust may claim 80% of the Mauritius tax payable as a deemed foreign tax credit.
6.3 If trusts are recognised, how are trusts affected by succession and forced heirship rules in Mauritius?
Where trusts are set up by Mauritian nationals, any disposition of property (in particular immoveable property situated in Mauritius) to a trust and the capacity of the settlor may be affected by inheritance, succession and forced heirship rules currently in force in Mauritius and embodied in the following main pieces of legislation:
- the Civil Code;
- the Succession and Wills Act;
- the Code of Civil Procedure; and
- the Non-Citizens (Property Restrictions) Act.
Forced Heirship Rules
In accordance with the Civil Code, a portion of the estate of a deceased must be reserved for his children in the following proportions:
- half the estate in case of one child;
- two thirds of the estate in case of two children; and
- three quarters of the estate in case of three or more children.
The unreserved portion may then be freely willed or otherwise disposed of to another person. The above forced heirship rules will apply to trusts set up by Mauritian nationals. Forced heirship rules do not apply to trusts set up by non-citizens.
Inheritance/Succession Rules
From an inheritance/succession perspective, the disposition of immoveable property is generally governed by the law where the property is located, while the disposition of moveable property is generally governed by the laws of the last country of permanent residence of a deceased (unless it is determined that such a disposition was done with the view to evade mandatory provisions of Mauritius especially if it directly or indirectly relates to immoveable property in Mauritius).
Any restrictions on inheritance of a non-citizen's property in his country of domicile may be reciprocated in Mauritius in virtue of the provisions of the Civil Code which stipulates inter alia that a non-citizen shall enjoy the same rights in Mauritius as those which are or may be granted to Mauritian citizens by international conventions entered into with the State of the said non-citizen.
Restrictions under the Non-Citizens (Property Restrictions) Act
Any disposition of immoveable property located in Mauritius is mandatorily determined in accordance with Mauritian law and is subject to certain restrictions under the Non-Citizens (Property Restrictions) Act mandatorily requiring non-citizens to seek the prior authorisation of the Prime Minister's Office before acquiring/holding any immoveable property in Mauritius. Exceptions to the above rule are acquisition:
- by inheritance (subject to certain provisos);
- through marriage (subject to certain provisos);
- under the Integrated Resort Scheme (luxury villas); and
- under the Real Estate Development Scheme.
6.4 Are foundations recognised in Mauritius?
Foundations are now recognised under the laws of Mauritius in virtue of the recently enacted Foundations Act 2012 which came into force on 1 July 2012.
6.5 If foundations are recognised, how are they taxed in Mauritius?
Foundations will be afforded the same tax treatment as trusts in Mauritius.
A resident foundation will be liable to income tax at the rate of 15% on its chargeable income.
Where it has suffered tax on its foreign-source income, it will be entitled to relief from such foreign tax under the Foreign Tax Credit Regulations (upon submission of written evidence of foreign tax suffered) or, where applicable, the DTAs Mauritius has in place with other countries. In the case of foundations holding category 1 global business licences, in the absence of evidence of foreign tax suffered, such foundations may claim 80% of the Mauritius tax payable as a deemed foreign tax credit.
6.6 If foundations are recognised, how are foundations affected by succession and forced heirship rules in Mauritius?
As in the case of trusts, where foundations are set up by Mauritian nationals, any disposition of property (in particular immoveable property located in Mauritius) to a foundation and the capacity of a settlor may be affected by inheritance, succession and forced heirship rules currently in force in Mauritius. See question 6.3 above.
7 IMMIGRATION ISSUES
7.1 What restrictions or qualifications does Mauritius impose for entry into the country?
All persons coming from countries which are not exempted from visa requirements and all other persons coming to Mauritius for purposes other than tourism, visit or business must apply for a visa and/or permit before entering the Mauritian territory.
Any non-citizen (other than a non-citizen married to a Mauritian) aged between 20-60 years, wishing to work in Mauritius, may apply for a work permit pursuant to the Non-Citizen Employment Restriction Act 1973 and other applicable laws.
Eligible non-citizens are:
- those who have been granted an offer of employment in Mauritius; and
- any foreign investor.
Unless otherwise specified under law, all applications for work permits are made by prospective employers to the Employment Division of the Ministry of Labour, Industrial Relations and Employment and must be substantiated by all relevant supporting documents. Separate applications for residence permits are generally lodged with the Passport and Immigration Office simultaneously.
Once work permits are approved, security deposits (in the form of cash or bank guarantees) are required to be furnished (for each work permit holder and accompanying dependent).
Applications for work permits by non-citizens who are already in Mauritius on a tourist visa will not be considered by the Mauritian authorities and must be lodged prior to entry on the territory.
7.2 Does Mauritius have any investor and other special categories for entry?
Mauritius now issues special permits, especially designed for investors, to allow faster entry into the jurisdiction.
Categories of Permits delivered are:
- Occupation Permits (Investor, Self-employed, Professional), allowing an eligible non-citizen to work and/or live in Mauritius for a maximum period of 3 years (renewable). Eligible non-citizens are:
-
- investors whose business activity should generate a turnover exceeding MUR 4 million annually with an initial investment of USD 100,000 or its equivalent in freely convertible foreign currency;
- professionals whose basic salary should exceed MUR 45,000 monthly. However, the basic salary for the category professional in the ICT Sector should exceed MUR 30,000 monthly;
- self-employed whose income from the business activity should exceed MUR 600,000 annually with an initial investment of USD 35,000 or its equivalent in freely convertible foreign currency; and
- dependants of an occupation permit holder may also apply for residence permits.
The process to obtain an occupation permit now takes approximately 3 days and applications are made through the Board of Investment.
- Permanent Residence Permits, allowing an eligible noncitizen to work and/or live in Mauritius for a period of 10 years (renewable). Eligible non-citizens are:
-
- An investor having held an Occupation Permit for 3 years immediately preceding the date of application for Permanent Residence Permit and whose company's turnover exceeded MUR 15 million every year during each of these 3 years in respect of each shareholder of the company.
- A self-employed person having held an Occupation Permit for 3 years immediately preceding the date of application for Permanent Residence Permit and whose income exceeded RS 3 million every year during each of these three years.
- A professional having held an Occupation or a Work Permit for 3 years immediately preceding the date of application for Permanent Residence Permit, and who has drawn a basic monthly salary of at least RS 150,000 during the entire 3 year period.
- A retired non-citizen having held a Residence Permit for three years and who has transferred to Mauritius USD 40,000 or its equivalent in convertible currency annually during each of these three years.
- Permanent residence permits are also issued for accompanying spouses and dependent children under 18 years.
- Applications are generally made through the Passport and Immigration Office.
7.3 What are the requirements in Mauritius in order to qualify for nationality?
Pursuant to the Mauritius Citizenship Act 1968 (as amended), Mauritian citizenship may be acquired in the following instances:
- On Adoption: In respect of a minor who is not a citizen of Mauritius, and where the adoptor, or in the case of a joint adoption, the male adoptor, is a citizen of Mauritius, the minor shall become a citizen of Mauritius as from the date of the order.
- By Incorporation of Territory: Where any territory becomes part of Mauritius, the President of Mauritius may, by order, specify the persons who shall be citizens of Mauritius by reason of their connection with that territory and those persons shall become citizens of Mauritius as from the date specified in the order.
- Registration of Commonwealth Citizens: Any
Commonwealth citizen, being a person of full age and capacity, may
be registered as a citizen of Mauritius where he makes an
application in the prescribed manner and satisfies the minister to
whom responsibility for the subject of internal affairs is assigned
(the Minister) that:
- he is of good character;
- he has an adequate knowledge of the English language, or any other language current in Mauritius, and of the responsibilities of a citizen of Mauritius;
- he has resided in Mauritius for a continuous period of 5 years, or such shorter period (not being less than 12 months) as the Minister may in the special circumstances of any particular case accept, immediately preceding the date of his application; and
- he intends, if registered, to continue to reside in Mauritius.
Notwithstanding the above, any Commonwealth citizen may be registered as a citizen of Mauritius if the Minister is satisfied that it is in the public interest to do so.
Additionally, in order to qualify for such registration, a Commonwealth citizen must first renounce any other citizenship which he may possess.
- Registration of Minor Children: A minor child
of a citizen of Mauritius may be registered as a citizen of
Mauritius upon application made in the prescribed manner by the
parent or guardian of the child.
The Minister may, in such special circumstances as he thinks fit, additionally cause any minor to be registered as a citizen of Mauritius. - Registration of other Persons: Any person, whether of full age or capacity who is, under sections 21 and 24 of the Constitution, entitled to be registered as a citizen of Mauritius, shall be so registered on making an application to that effect to the Minister in the prescribed manner.
Where a non-citizen is or was married to a citizen of Mauritius, he may be registered as a citizen of Mauritius if he satisfies the Minister that he has lived with his spouse under the same conjugal roof in Mauritius for a period of not less than 4 years immediately preceding the date of his application for registration.
In the above instances, the Minister, in his absolute discretion and without giving any reason, may refuse to register an applicant as a citizen of Mauritius, if he is satisfied that it is in the interests of national security or public policy not to grant the application.
- Naturalisation: A certificate of
naturalisation may be granted to an alien or British protected
person of full age and capacity who makes an application in the
prescribed manner and satisfies the Minister that:
- he is of good character;
- he has an adequate knowledge of the English language, or any other language current in Mauritius, and of the responsibilities of a citizen of Mauritius;
- he has resided in Mauritius for a continuous period of 12 months immediately preceding the date of his application;
- during the 7 years immediately preceding the period of 12 months referred to in paragraph (c) he has resided in Mauritius for aggregate periods amounting to not less than 5 years; and
- he intends, in the event of a certificate being granted to him, to continue to reside in Mauritius.
As an incentive to investors, the Minister may accept a continuous period of residence of not less than 2 years instead of the qualification in respect of residence where a person has invested in Mauritius a sum of not less than USD 500,000 or such other sum as may be prescribed.
An alien or British protected person shall not be granted a certificate of naturalisation under this section unless he first renounces the nationality or citizenship of any other country which he may possess and takes the prescribed oath or affirmation of allegiance.
Notwithstanding the above, the Minister may grant a certificate of naturalisation to an alien or British protected person if he is satisfied that it is in the public interest so to do.
Generally , where a person is required to renounce the nationality or citizenship of a country (for the purposes of acquiring Mauritian citizenship) but under the law of that country he is not permitted to do so, he shall take an oath, before the Master and Registrar of the Supreme Court and provide the declaration prescribed under law in that regard.
7.4 Are there any taxation implications in obtaining nationality in Mauritius?
As stated above, a person's nationality is not relevant to the determination of a person's tax status in Mauritius which is determined by residence. See question 2.4 above.
8 TAXATION OF CORPORATE VEHICLES
8.1 What is the test for a corporation to be taxable in Mauritius?
All companies (or other business structures), resident in Mauritius for tax purposes, are liable to tax in Mauritius.
The taxation of Mauritian resident companies (or other business structures) is generally regulated by the Income Tax Act 1995 (with special tax regime(s) in place for tax incentive companies such as companies holding categories 1 and 2 business licences, other qualified corporations such banks holding a category 2 global business licence, freeport companies and offshore trusts).
The rate of corporate income tax in Mauritius is 15% on chargeable income.
The Income Tax Act 1995 defines a resident, when applied to:
- a company: as a company which is incorporated or centrally managed and controlled in Mauritius;
- a société (partnership): as a société, having its seat or siège in Mauritius and with at least one partner or associate or associé or gérant being resident in Mauritius; and
- a trust: as a trust which is administered in Mauritius and where a majority of the trustees are resident in Mauritius, or where the settlor of the trust was resident in Mauritius at the time the instrument creating the trust was executed. A trust of which the settlor is not resident in Mauritius or all the beneficiaries hold either category 1 or category 2 global business licences can elect to be non-resident by filing a declaration to that effect. Otherwise it will be a resident trust for tax purposes.
A resident company (or other business structure) is taxed on its worldwide income, which includes foreign-source income but excludes exempt income.
A non-resident company (or other business structure), is only liable to income tax on its Mauritius-source income.
Where the source of any income is not exclusively in Mauritius, that income shall be apportioned between its source in Mauritius and its source elsewhere in such a manner as the Director General of the Mauritius Revenue Authority thinks fit.
A resident company which has suffered foreign tax on its foreign-source income is entitled to relief from such foreign tax under the Foreign Tax Credit Regulations or, where applicable, the DTAs Mauritius has in place with other countries. Relief under the Foreign Tax Credit Regulations is conditional upon submission of written evidence of foreign tax suffered. In the case of category 1 global business licence companies, in the absence of evidence of foreign tax suffered, such companies may claim 80% of the Mauritius tax payable as a deemed foreign tax credit.
8.2 How are branches of foreign corporations taxed in Mauritius?
A branch of a foreign corporation will be liable to tax in Mauritius if it is deemed to be resident in Mauritius for tax purposes.
A branch of a foreign corporation shall be resident in Mauritius for tax purposes if it is registered in Mauritius, is centrally managed and controlled or carries on business in Mauritius.
The fact that a foreign company (or its branch) holds meetings of directors or shareholders or carries on other activities concerning its internal affairs in Mauritius will not, of itself, be deemed to be carrying on business in Mauritius or being central managed and controlled in Mauritius. Investment in funds or holding property will also not make the foreign company (or its branch) resident for tax purposes.
Clerical functions, such as maintaining a bank account, invoicing operations, management and administration services and entry into contracts in respect of a company's international business (e.g., swap financing and loan funding agreements) at the address of the company's registered office (provided that the contract is accepted outside Mauritius) will not ordinarily amount to carrying on business in Mauritius or being centrally managed and controlled in Mauritius.
All the profits (other than profits derived from the sale of units and securities which are tax-exempt) of such entities are taxable. Taxable profits are determined under normal and existing tax law and principles.
9 TAX TREATIES
9.1 Has Mauritius entered into income tax and capital gains tax treaties and, if so, what is their impact?
In response to the growing demands of the OECD and its member governments for greater fiscal transparency, Mauritius has been keen to foster an image as a reputable international finance centre and has signed a number of tax treaties and/or other preferential trade agreements with other jurisdictions.
The main sets of treaties and/or other preferential trade agreements in place are:
- double tax avoidance treaties/agreements ("DTAs");
- investment promotion and protection agreements ("IPPAs");
- tax information exchange agreements ("TIEAs"); and
- bilateral treaties or other preferential trade agreements ("PTAs").
Mauritius has signed and ratified:
- 38 DTAs with an extensive network of jurisdictions which include Bangladesh, Barbados, Belgium, Botswana, China, Croatia, Cyprus, France, Germany, India, Italy, Kenya, Kuwait, Lesotho, Luxembourg, Madagascar, Malaysia, Mozambique, Namibia, Nepal, Nigeria, Oman, Pakistan, Qatar, Rwanda, Senegal, Seychelles, Singapore, South Africa, Sri Lanka, Swaziland, Sweden, Thailand, Tunisia, Uganda, UAE, UK and Zimbabwe and is a party to a series of treaties under negotiation;
- 22 IPPAs with an extensive network of jurisdictions which include Barbados, Belgium/Luxembourg Economic Union, Burundi, China, Czech Republic, Finland, France, Germany, India, Indonesia, Madagascar, Mozambique, Pakistan, Portugal, Republic of Korea, Romania, Senegal, Singapore, South Africa, Sweden, Switzerland, and UK & Northern Ireland and is a party to a series of IPPA under negotiation;
- 3 TIEAs with the following jurisdictions: Australia; Denmark; and Finland. Mauritius has additionally signed TIEAs with the Faroe Islands, Greenland and Norway which are not yet in force; and
- a PTA with Pakistan and an Interim Economic Partnership Agreement ("EPA") with the ESA & the EU.
Its extensive network of tax treaties and/or other preferential trade agreements, coupled with its long-established links with India and Africa, has made Mauritius an increasingly attractive, if not preferred, investment gateway to both Africa and Asia.
9.2 Do the income tax and capital gains tax treaties generally follow the OECD or another model?
All of Mauritius' double taxation avoidance treaties are based on the OECD Model Treaty of 1977.
Any exchange of information under the said treaties is, however, limited to matters concerning the working of the treaties themselves.
Mauritius was 'white listed' by the OECD, as a result of the G20 summit in London and this confirms Mauritius' untarnished track record as an international finance centre of substance.
9.3 Has Mauritius entered into estate and gift tax treaties and, if so, what is their impact?
Mauritius does not have any estate or gift tax.
9.4 Do the estate or gift tax treaties generally follow the OECD or another model?
This is not applicable in Mauritius.
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