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Mauritius taxation: Guide to business taxes & tax rates.

Mauritius taxation: Guide to business taxes & tax rates

Mauritius has earned its reputation as a business-friendly destination, drawing investors from around the globe. One of the key factors contributing to its appeal is its well-structured and progressive taxation system. In this article, we will explore the nuances of Mauritius’ taxation system, investigating how it stimulates economic growth and entices foreign investment.

Key takeaways

  • Mauritius has a dual taxation system, incorporating both direct and indirect taxes. This balanced approach serves to generate government revenue while fostering a business-friendly environment, making it an attractive destination for investors.
  • The standout feature of Mauritius’ corporate income tax system is its flat rate of 15%, contributing to a transparent and predictable business environment.
  • Mauritius has established an extensive network of double taxation avoidance treaties (DTAs) with numerous countries. These treaties provide businesses with protection against being taxed twice on the same income, further enhancing the jurisdiction’s attractiveness for global investors.

Overview of Mauritius’ taxation system

Mauritius boasts a favourable and simple tax system that attracts investors globally. The key elements of the tax structure include corporate tax, which stands at a flat rate of 15%, offering an attractive environment for businesses. Furthermore, individuals benefit from a progressive income tax system, with rates ranging from 10% to 25%. Value-added tax (VAT) is implemented at a standard rate of 15%, while specific sectors may enjoy reduced rates or exemptions. Additionally, there is no capital gains tax, inheritance tax, or withholding tax on dividends, making Mauritius a tax-efficient jurisdiction.

This tax-friendly environment, coupled with various incentives, positions Mauritius as an appealing destination for individual and corporate investors seeking financial advantages.

Corporate income tax

One of the standout features of Mauritius’ taxation system is its flat corporate income tax rate of 15% (companies involved in exporting goods are subject to a 3% tax on chargeable income attributed to exports, calculated using a prescribed formula). This simplicity contributes to a transparent and predictable business environment, fostering trust among investors.

EntityTax rate
Global Business Companies (GBC) firms (excluding specified income, as outlined below)15%
Freeport operators or Private Freeport Developers involved in Freeport activities3%
Companies involved in the export of goods3%
All other companies (excluding specified income, as detailed below)15%
  • Effective January 1, 2019, Global Business Category 1 (GBC1) companies have been rebranded as Global Business Licence (GBL) companies and are subject to a 15% tax rate.
  • All companies, including GBL entities, are eligible for an 80% tax exemption concerning specific foreign-source income. This includes income such as foreign dividends not allowed as a deduction in the source country, interest income, earnings from companies engaged in leasing ships and aircraft, revenue from leasing and providing international fibre capacity, interest income from money lent through a peer-to-peer lending platform licensed by the relevant authority after the five-year tax holiday, income from reinsurance and reinsurance brokering activities, income from the sale, financing arrangement and asset management of aircraft and its spare parts, along with aviation-related advisory services.
  • The tax exemption on interest earned by Collective Investment Schemes (CIS) or Closed End Funds has been increased from 80% to 95%.
  • If a company claims the 80% exemption, no actual foreign tax credit is permitted on foreign-source income.
  • Freeport companies, excluding local trading activity, were tax-exempt until June 30, 2021, provided that the Freeport certificate was issued on or before June 14, 2018.

Partial exemption

Certain income, such as dividends, capital gains and interest, may benefit from partial or full exemptions, particularly when derived from specified activities. This incentivises investment in key sectors, such as financial services, technology and renewable energy.

Tax treaties

Mauritius has an extensive network of double taxation avoidance treaties (DTAs) with numerous countries. These treaties provide businesses with additional protection against the risk of being taxed twice on the same income, further enhancing the attractiveness of the jurisdiction for international investors.

Here is an extensive list of Mauritius’ double taxation avoidance treaties (DTAs):

CountryDate of agreementCountryDate of agreement
Australia2002Morocco2001
Austria2004Mozambique2001
Bangladesh1983Namibia2002
Barbados2003Nepal1987
Belgium1999Netherlands2004
Botswana2005Nigeria2001
Brazil2003Oman1996
Canada1982Pakistan1984
China1986Philippines1982
Croatia2012Poland2013
Cyprus2000Portugal2001
Czech Republic2015Qatar2001
Denmark2002Republic of Korea2005
Egypt2001Romania2008
Finland2002Russia2000
France1980Rwanda2001
Germany1996Saudi Arabia1997
Ghana2003Senegal2002
Hungary2013Seychelles1985
Iceland2010Singapore1982
India1982South Africa1996
Indonesia1989Spain2004
Ireland2005Sri Lanka1983
Italy2005Sweden2003
Japan2005Switzerland1996
Kenya1985Tanzania1986
Kuwait1999Thailand1986
Lesotho1998Tunisia2001
Luxembourg2005Uganda2004
Madagascar2001United Arab Emirates2006
Malaysia1994United Kingdom1982
MauritiusUnited States of America1989
Mexico2006Zambia1995
Monaco2003Zimbabwe2005

Withholding tax

There is no withholding tax (WHT) with regard to payments made by Global Business Licence (GBL) entities to non-residents not conducting business in Mauritius using their foreign-source income.

Value-added tax (VAT)

Standard rate

Mauritius applies a standard VAT rate of 15%, with certain goods and services subject to a reduced rate of 5% or being exempt altogether. This helps strike a balance between revenue generation and supporting the affordability of essential items.

The following table outlines the key features of Mauritius’ VAT system:

CategoryTax rateDetails
Standard rate15%Applies to most taxable goods and services supplied in Mauritius by VAT-registered entities.
Zero-rated supplies0%Applies to specific goods and services listed in the Fifth Schedule of the VAT Act. This includes exports, certain foodstuffs, medical services, educational services and residential building sales.
Exempt suppliesN/ANot subject to VAT at all. Examples include banking services (except specific types), insurance and postal services.
Registration thresholdMUR 10 millionBusinesses with annual taxable turnover exceeding MUR 10 million are required to register for VAT.
Return filing frequencyMonthly/QuarterlyVAT-registered persons with annual taxable turnover exceeding MUR 10 million must file VAT returns monthly. Others can file quarterly.
Taxable imports15%VAT is charged at the standard rate of 15% on the value of goods imported into Mauritius.
Key requirements
  • Issue VAT invoices for sales transactions
  • Maintain proper VAT records
  • File VAT returns and pay any due VAT within the stipulated timeframe

Registration threshold

Small businesses benefit from a relatively high VAT registration threshold, reducing the compliance burden on startups and encouraging entrepreneurship.

Personal income tax

The Mauritian income tax system transitioned to a progressive tax rate system on July 1, 2023, replacing the previous flat rate with 11 income brackets and tax rates ranging from 0% to 20%. The following table offers a comprehensive breakdown of the taxable income brackets, basis of computation and corresponding tax rates:

Taxable income bracket (MUR)Basis of computation (MUR)Tax rate
Up to 390,000First 390,0000%
390,001 – 430,000Next 40,0002%
430,001 – 470,000Next 40,0004%
470,001 – 530,000Next 60,0006%
530,001 – 590,000Next 60,0008%
590,001 – 890,000Next 300,00010%
890,001 – 1,190,000Next 300,00012%
1,190,001 – 1,490,000Next 300,00014%
1,490,001 – 1,890,000Next 400,00016%
1,890,001 – 2,390,000Next 500,00018%
Over 2,390,000Remainder20%

Additional notes:

  • The fiscal year in Mauritius runs from July 1st to June 30th.
  • Residents are taxed on their global income, while non-residents are taxed only on income earned within Mauritius.
  • Various exemptions and deductions are available, such as those for housing allowances, medical expenses and education, providing relief for individuals and encouraging skilled professionals to choose Mauritius as their place of residence.

Customs duty and excise tax

While Mauritius relies on customs duties and excise taxes for revenue, efforts are made to keep these rates competitive. This contributes to cost-effectiveness for businesses engaged in international trade.

Property tax

Property tax in Mauritius is relatively low, further supporting the real estate market and attracting foreign investors to the island.

How Acclime can help your business stay tax-compliant

Mauritius’ taxation system reflects a strategic balance between generating government revenue and fostering a business-friendly environment. The flat corporate income tax rate, extensive network of tax treaties and progressive personal income tax rates contribute to the nation’s attractiveness for investors. As Mauritius continues to position itself as a global business hub, its progressive and transparent taxation system plays a pivotal role in sustaining economic growth and encouraging foreign investment.

Acclime plays a crucial role in assisting businesses in Mauritius navigate the intricacies of the taxation system and regulatory landscape. With a deep understanding of Mauritius’ business environment, Acclime provides comprehensive services to help companies optimise their tax positions, ensure compliance with local regulations and enhance overall operational efficiency.

Contact us to explore how our professional corporate services can tailor solutions to meet your specific business needs. Let Acclime be your trusted partner in unlocking the full potential of your business in Mauritius.