Mauritius

Companies are liable to corporate income tax at the rate of 15% on their worldwide income, subject to any applicable exemptions on specific categories of income or activities, as well as any allowable foreign tax credits for taxes paid abroad.

Non-resident companies, whose central management and control are exercised outside Mauritius, are also taxed at 15% on income derived from Mauritius, excluding income that is expressly exempt.

With effect from 1 July 2024, companies with an annual turnover exceeding MUR 50 million are required to pay an additional 2% Corporate Climate Responsibility Levy on their chargeable income.

Furthermore, companies that have taxable supplies exceeding MUR 24 million, or are otherwise required to be registered under the Value Added Tax Act 1998 (VATA), and that also have chargeable income above MUR 24 million in an accounting year, will be liable to pay a Fair Share Contribution on income earned during the period 1 July 2025 to 30 June 2028. This contribution, however, does not apply to:

• companies holding a Global Business Licence; or
• companies benefiting from statutory tax holidays.

This temporary measure, introduced to enhance fiscal equity, applies to income derived over the above-mentioned three-year period.

Companies taxed at the rate of 3% will be liable to pay the Fair Share Contribution at 2% of their chargeable income, while companies taxed at 15% will pay the contribution at 5% of their chargeable income. The Fair Share Contribution does not apply to global business entities or other exempt companies enjoying tax holidays under Mauritian law.

Mauritius‑resident companies that form part of a multinational enterprise group with annual consolidated global revenue exceeding EUR 750 million are now subject to the Qualified Domestic Minimum Top-Up Tax (QDMTT). This mechanism ensures that a minimum level of tax is paid in Mauritius in line with the Organisation for Economic Co-operation and Development’s Pillar Two Framework.

The QDMTT applies from the year of assessment 2025/2026 and is applicable where the group’s consolidated annual revenue meets or exceeds the above threshold in any two of the four years of assessment preceding 2025/2026. However, Mauritius has not yet enacted the accompanying QDMTT regulations that will set out the detailed methodology for computing the top-up tax.

The taxation of income in Mauritius depends on an individual’s or entity’s residence status and on whether the income is sourced from Mauritius.

Mauritius‑resident individuals and entities are subject to income tax on their worldwide income. However, foreign‑source income is taxable in Mauritius only to the extent that it is remitted to Mauritius. Non‑resident individuals or entities are taxable solely on income — other than income expressly exempt — that is derived from Mauritius. A non‑resident entity conducting business in Mauritius (for example, through a branch) will also be taxed in Mauritius, as the income attributable to that business presence is treated as Mauritian‑source income.

Mauritius does not impose tax on capital gains.

Value added tax (VAT) is imposed at the standard rate of 15% on the taxable supply of goods and services in Mauritius. Certain categories of goods and services are either exempt from VAT or zero‑rated.

VAT liability arises through registration, and compulsory registration applies to two categories of taxable persons:

• any person whose annual turnover exceeds MUR 3 million; or
• any person engaged in a prescribed activity or profession, regardless of turnover.

The Mauritius Revenue Authority (MRA) also has the authority to compulsorily register any person who is deemed to be a taxable person and who should have been registered for VAT but has not done so.

Entities that exclusively make zero‑rated supplies are not required to register for VAT.

Interest paid by any person, other than a bank or a non‑bank deposit‑taking institution, to a non‑resident is generally subject to withholding tax at 15%.

However, interest paid out of foreign‑source income by a corporation holding a Global Business Licence to a non‑resident who does not carry on business in Mauritius is exempt from withholding tax.

Services

A 5% withholding tax applies to payments made to certain categories of service providers resident in Mauritius.

Specifically, a 5% withholding tax is imposed on payments made to service providers listed in the Fifth Schedule to the Income Tax Act (ITA), including accountants, legal consultants, and tax advisers.

A 3% withholding tax applies to payments made to:

• consultants other than those covered under the Fifth Schedule (i.e. excluding accountants, legal consultants, and tax advisers);
• providers of security and cleaning services; and
• motor surveyors and mechanics receiving payments from insurance companies, subject to prescribed conditions.

Payments made by any person (other than an individual) to a non‑resident for services rendered in Mauritius are subject to withholding tax at 10%. Withholding tax does not apply where the payee is exempt or where an applicable Double Taxation Agreement provides for an exemption.

Royalties

Royalties paid to residents are subject to withholding tax at 10%. This withholding tax is treated as an advance payment of income tax and is creditable against the resident payee’s tax liability.

Royalties paid to non‑residents are subject to withholding tax at 15%, which constitutes the final tax payable on such royalties. No withholding tax applies to royalties paid by a company to a non‑resident out of its foreign‑source income.

Rent

Rent paid to residents is subject to withholding tax at 7.5%.

Rent paid to non‑residents is subject to withholding tax at 10%, which is treated as the final tax on that rental income.

The ITA provides for a General Anti‑Avoidance Rule (GAAR) under section 90, aimed at countering arrangements whose sole or dominant purpose is to secure a tax benefit. In determining whether a transaction falls within this provision, regard is given to several factors, including how the transaction was undertaken and the relationship between its legal form and its economic substance. A “tax benefit” is defined as the avoidance, postponement, or reduction of an income tax liability.

In assessing whether section 90 applies, the MRA must consider the following:

• the manner in which the transaction was entered into or carried out;
• the form and substance of the transaction;
• the result in relation to the operation of the ITA that, but for this section, would have been achieved by the transaction;
• any change in the financial position of the relevant person that has resulted, will result, or may reasonably be expected to result, from the transaction;
• any change in the financial position of any person who has, or has had, any connection, whether of a business, family, or other nature, with the relevant person, being a change that has resulted or may reasonably be expected to result from the transaction;
• whether the transaction has created rights or obligations which would not normally be created between persons dealing with each other at arm’s length under a transaction of the kind in question;
• the participation in the transaction of a resident corporation or its carrying on business outside Mauritius; and
• in concluding that the person did so for the sole or dominant purpose of enabling the relevant person (or other persons) to obtain a tax benefit.

In addition to the GAAR, the ITA contains several specific anti‑avoidance provisions, which may apply in relation to:

• the application of the arm’s-length principle;
• interest on debentures issued by reference to shares;
• excessive remuneration or profit‑sharing arrangements;
• excessive remuneration paid to shareholders or directors;
• benefits granted to shareholders;
• excessive management expenses;
• leases granted for less than adequate rent; and
• rights over income that is retained.

Where the MRA concludes that a taxpayer has implemented arrangements designed primarily or predominantly to avoid tax, it may reassess the taxpayer based on the amount of tax that would have been payable had the avoidance arrangement not been entered into.

Case law indicates that the test for invoking the anti‑avoidance provisions is an objective one; namely, whether a reasonable person would conclude that the taxpayer entered into the impugned arrangement for the dominant purpose of obtaining a tax benefit. There are currently only a limited number of Supreme Court judgments addressing the GAAR under the ITA.

In recent years, however, the MRA has relied more frequently on the GAAR, and related issues are increasingly being litigated before the Revenue Tribunal (RT) and the Mauritian courts.

The most frequent causes of tax disputes in Mauritius relate to personal and corporate income tax as well as value added tax (VAT).

In relation to personal income tax, the dispute may relate to under-declared income, disallowable expenses and the denying of exemptions claimed by the taxpayer.

In relation to corporate income tax, the issues vary widely. Frequent examples include:

• under-declared income;
• the disallowance of expenses (typically because they are not incurred exclusively in the gross production of income); and
• the denying of exemptions or tax holidays.

More recently, the MRA is increasingly applying targeted anti-avoidance provisions (such as section 75, ITA; namely, the arm’s-length provision) and general anti-avoidance provisions (section 90, ITA) in relation to arrangements such as interest-free loans and other intra-group arrangements.

In relation to VAT, disputes arise on the non-registration of taxpayers for tax purposes, under-declared taxable supplies and the disallowance of input VAT. Occasionally, the MRA also invokes anti-avoidance provisions (e.g. in cases where the taxpayer enters into arrangements to artificially avoid the threshold for VAT registration purposes).

Although less common than corporate and VAT issues, disputes relating to the imposition of customs and excise duties are also regularly referred to the tax tribunal in Mauritius, particularly relating to the classification and value of imported items, the applicable duties and any upliftment of the value of a consignment.

Disputes with respect to transfer taxes are not uncommon, particularly regarding the valuation of immovable property.

The process and resolution of tax controversies are provided in the following legislative instruments:

• Mauritius Revenue Authority Act 2004;
• Revenue Tribunal Act 2025; and
• specific revenue laws such as the ITA, VATA, Social Contribution and Social Benefits Act 2021, Gambling Regulatory Authority Act 2007 amongst others.

An Alternative Tax Dispute Resolution (ATDR) panel has been established to consider applications for review submitted by taxpayers who have objected to an assessment. The ATDR mechanism provides a fast‑track process aimed at facilitating an efficient and amicable resolution of tax disputes. The panel is required to issue its decision within six months from the date the case is referred to it for review. Following the panel’s decision, the MRA must either amend or maintain the assessment in line with the ATDR panel’s findings.

Alternatively, taxpayers and the MRA may choose to engage in mediation before the Revenue Tribunal when both parties believe that the issues raised in their written representations can be resolved through a mediated settlement.