Mauritius Corporate Tax Guide

Mauritius

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International Tax and Transaction Services – International Corporate Tax Advisory and International Tax and Transaction Services – Transaction Tax Advisory

Ryaad Owodally

A. At a glance

+230 403-4777, Ext. 4717

Mobile: +230 5727-0285 Email: ryaad.owodally@mu.ey.com

Corporate Income Tax Rate (%) 15 (a)

Capital Gains Tax Rate (%) 0 (a)

Branch Tax Rate (%) 15 (a)

Withholding Tax (%)

Dividends 0 Interest 15 (b)

Royalties 10/15 (c)

Net Operating Losses (Years)

Carryback 0 Carryforward 5

(a) See Section B. (b) This withholding tax applies to interest paid to any person, other than a com pany resident in Mauritius, by a person, other than a Mauritian bank or a per son authorized to carry on deposit-taking business in Mauritius. This rate may be reduced if the recipient is a tax resident of a treaty-partner country. (c) The withholding tax rate is 10% for royalties paid to residents. For nonresi dents, the rate is 15% unless the recipient is resident in a treaty jurisdiction and the applicable treaty provides for a lower rate. The withholding tax rate does not apply if the payer is a corporation holding a Global Business Licence (GBL) under the Financial Services Act 2007 (GBL company) and if it pays the interest out of its foreign-source income.

B. Taxes on corporate income and gains

Corporate income tax. Companies resident in Mauritius are sub ject to income tax on their worldwide income. Resident companies are companies with their central management and control in Mauritius. If a nonresident company has a branch carrying on business in Mauritius, the nonresident company is subject to tax on the income of the branch.

Rates of corporate income tax. The corporate income tax rate is 15% of the annual taxable net profits.

A 3% rate applies to the taxable profits attributable to the export of goods, effective from 1 July 2017. Export of goods includes international buying and selling of goods, whereby the goods are shipped in the original country to the final importer in the

importing country, without the goods being physically landed in Mauritius. A manufacturing company that is engaged in the medical, biotechnology or pharmaceutical sector and that holds an Investment Certificate issued by the Economic Development Board (EDB) is subject to tax at a rate of 3% if the company satisfies the prescribed conditions on the substance of its activi ties and has not applied any of the exemptions specified in Part II of the Second Schedule. A Higher Education Institution regis tered under the Higher Education Act set up in Mauritius is also subject to tax at the rate of 3%.

From the 2020-21 year of assessment, banks are subject to a separate tax regime. Subject to certain exceptions, the first MUR1.5 billion is taxed at a rate of 5% and a tax rate of 15% applies to the taxable profits exceeding MUR1.5 billion. If the taxable profits of the bank exceed MUR1.5 billion in a year and the 2017-18 year of assessment (the base year) and if the bank satisfies certain conditions, the 15% tax rate applies to only the excess of the taxable profits for the base year over MUR1.5 bil lion. The prescribed conditions for the 2020-21 and 2021-22 years of assessment are satisfied if the bank grants at least 5% of its new credit facilities to the following:

• Small and medium enterprises in Mauritius

• Enterprises engaged in agriculture, manufacturing or produc tion of renewable energy in Mauritius

• Operators in African or Asian jurisdictions

For this purpose, a credit facility is either of the following:

• A facility, whether fund-based or non-fund-based, made avail able to a person and containing an obligation to disburse a sum of money in exchange for a right to repayment of the amount disbursed and outstanding and to payment of interest or other charges on such amount, including a loan, overdraft and leasing facility

• An extension of the due date of a debt, any guarantee issued and any commitment to acquire a debt security or other right to pay ment of a sum of money

The tax rate is 5% if the taxable profits of the bank do not exceed MUR1.5 billion for the base year even if the taxable profits for the year in question exceeds MUR1.5 billion and if the bank satisfies certain conditions that have not yet been prescribed. Under the Mauritian tax laws, banks are not allowed to claim a foreign tax credit.

From the 2021-22 year of assessment, the tax payable by a life insurance company is based on the higher of the tax payable under the normal rule or 10% of the relevant profit. For this pur pose, relevant profit is defined as profit attributable to sharehold ers as adjusted by any capital gain or capital loss reflected in the income statement of the company.

A tax of 10% applies to any winnings exceeding MUR100,000 that are paid to a winner by the Mauritius National Lottery Operator, operator of the Loterie Vert, a casino operator, a hotel casino operator or a gaming house operator licensed under the Gaming Regulatory Authority Act.

Interest income on debentures, bonds or sukuks (debt instru ments used in Islamic banking) issued by a company to finance renewable energy projects, the terms and conditions of which have been approved by the Mauritius Revenue Authority (MRA), is exempt from tax, effective from 1 July 2017.

A requirement to establish a Corporate Social Responsibility (CSR) fund applies to companies. Companies must set up a CSR fund equal to 2% of chargeable income for the preceding year. Companies use this fund to implement a CSR program in accor dance with their own CSR framework. For this purpose, the CSR program must have as its object the alleviation of poverty, the relief of sickness or disability, the advancement of education of vulnerable persons or the promotion of any other public object beneficial to the Mauritian community.

If the contribution is less than the 2% minimum, the difference must be paid to the MRA when the company submits its annual tax return. Certain companies, such as Global Business Corporations set up under the Financial Services Act 2007, com panies that hold an Integrated Resort certificate referred to in the Investment Promotion (Real Estate Development Scheme) Regulations, 2007, companies issued a certificate as a freeport operator or private freeport developer under the Freeport Act on income from export and Real Estate Investment Trusts (REITs) are excluded from the purview of the CSR rules. Effective from the 2013 year of assessment, companies may spend up to 20% more than their statutory CSR obligation in any year but not more than two consecutive years and the excess CSR spending may then be offset in five equal consecutive annual installments against its future CSR liability. Subject to the approval of the CSR committee, up to 20% of the CSR liability may be carried forward to the following year.

Under amendments contained in the Finance (Miscellaneous Provisions) Act 2016 (FMPA 2016) and the Finance (Miscellaneous Provisions) Act 2017, at least 50% of any CSR fund set up during the period from 1 January 2017 to 31 December 2018 must be paid to the National Social Inclusion Foundation (CSR Foundation) through the MRA. Effective from 1 January 2019, the contribution to the CSR Foundation will be 75%. The balance must be applied to the entity’s own CSR frame work for CSR funds set up by 31 December 2018. Thereafter, the entity is allowed to contribute to a non-governmental organiza tion implementing a CSR program in the following priority areas of intervention:

• Dealing with health problems

• Educational support and training

• Family protection, including gender-based violence

• Leisure and sports

• Peace and nation building

• Road safety and security

• Social housing

• Socio-economic development as a means of poverty alleviation

• Supporting people with disabilities

• Such other areas as the MOFED may determine

• Fields of advocacy, capacity building and research for consid eration relating to the other priority areas of intervention

The above priority areas target individuals and families registered under the Social Register of Mauritius and vulnerable groups under the Charter of the National CSR Foundation. Contributions to the restoration of a building designated under the National Heritage Fund Act also qualify as a CSR program.

The CSR does not apply to a company that has elected to pay its tax under the presumptive tax system.

Otherwise, the balance must be remitted to the MRA at the time of submission of the annual tax return.

Any excess CSR contribution made before the change to the law contained FMPA 2016 can be offset against the CSR liability that should be made to the CSR contribution, effective from the 2016-17 year of assessment over a period of five years.

The law now specifically provides that no CSR money can be specified regarding the following activities:

• Activities discriminating on the basis of race, place of origin, political opinion, color, creed or sex

• Activities promoting alcohol, cigarettes or gambling

• Activities targeting shareholders, senior staff or their family members

• Contributions to any government department or parastatal body

• Contributions to natural disasters mitigation programs

• Contributions to political or trade union activities

• Sponsorship for the purpose of marketing for companies

• Staff welfare and training of employees

The amount payable to the MRA may be reduced by 25% of the total CSR liability if a company intends to use the fund to finance a CSR program that has been approved by the CSR Foundation on or after 1 January 2019; the prior written approval of the CSR Foundation is mandatory.

The CSR liability cannot be reduced by any credit.

A special levy is imposed on banks. The levy does not apply if, in the preceding year, the bank had incurred a loss or if its book profit did not exceed 5% of its operating income. For the 2009 through 2013 years of assessment, the levy equaled the sum of 3.4% of book profit and 1% of operating income. For the 2014, 2015, 2015-16, 2016-17, 2017-18 and 2018-19 years of assess ment, the tax base and rates remain unchanged for Segment B banking business. Segment B banking business refers to banking transactions with nonresidents and corporations that hold a Global Business License (GBL) under the Financial Services Act 2007. The levy is computed at 10% of the chargeable income from other sources for the 2014, 2015, 2015-16, 2016-17, 201718 and 2018-19 years of assessment. From the 2019-20 year of assessment, the levy is included in the Value Added Tax Act. It is based on the aggregate net interest income and other income from banking transactions before deducting any expenses. The levy does not apply to banking transactions with nonresidents and companies holding a GBL under the Financial Services Act and is not payable if the bank incurs a loss. If the income that is sub ject to the levy is less than MUR1.2 billion, the rate of the levy is 5.5%; otherwise, the rate is reduced to 4.5%. For a bank that has

been in operation since 30 June 2018, the levy is restricted to 1.5 times the levy for the 2017-18 year of assessment. The levy must be paid within five months after the year-end of the bank. The levy is not deductible for the purposes of computing the taxable profits of the bank.

“Telephony service providers,” defined as a provider of public fixed or mobile telecommunication networks and services, are subject to a solidarity levy for the 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 years of assessment. The levy equals the sum of 5% of book profit and 1.5% of turnover. The levy does not apply if, in the preceding year, the service provider incurred a loss or if its book profit did not exceed 5% of its turnover. From the 2020-21 year of assessment, the levy is based on the aggregate of 5% of the accounting profit and 1.5% of the turnover of the operator. For this purpose, the accounting profit is the profit of an operator from all its activities and computed in accordance with the International Financial Reporting Standards.

Tax advantages for certain companies. The following types of companies may qualify for tax advantages:

• Freeport companies.

• Information and Communication Technology companies.

• Companies engaging in innovation-driven activities for intel lectual property assets developed in Mauritius or deriving income from intellectual property assets developed in Mauritius on or after 10 June 2019.

• Companies set up on or before 30 June 2025 that are engaged in the operation of an e-commerce platform and that are issued an e-commerce certificate by the EDB are exempt from tax on their income, provided that the company satisfies its substance requirements. The exemption is restricted to five successive years starting from the year the company starts its activities.

• Companies engaged in the exploitation and use of deep-sea ocean water activities for certain specific purposes.

• Companies engaged in spinning, weaving, dyeing or knitting.

Freeport companies. Freeport operators and private Freeport developers are exempt from corporate income tax on sales made to persons outside Mauritius up to 30 June 2021, if the freeport certificate was issued on or before 14 June 2018. If the freeport certificate was issued on or after 14 June 2018, no corporate tax exemption applies. A freeport operator or private freeport devel oper is not subject to the CSR rules with respect to its income from exports. A freeport operator or private freeport developer is subject to tax at a rate of 3% if it satisfies all of the following conditions:

• It is engaged in the manufacturing of goods on the local market.

• The entity employs a minimum of five staff members.

• It incurs an annual expenditure of more than MUR3,500,000.

Information and Communication Technology companies. Information and Communication Technology (ICT) companies are classified as tax-incentive companies. If the investment certificate of an ICT company is issued before 30 September 2006 and if the ICT company is engaged in business-process outsourcing and back-office operations or in the operation of call centers or contact centers, the ICT company may elect within 60 days of the

date of the issuance of its investment certificate to have twothirds of its net income exempted from tax up to and including the income year ended 30 June 2012. This reduces the effective tax rate to 5% of taxable income. Income derived by other ICT companies from nonresidents is exempt from tax through the income year ended 30 June 2012. Income derived from residents is taxable at the incentive rate of 15%. Losses incurred during the exemption period may be carried forward to years following the expiration of the exemption period.

Innovation-driven activities. The income of a company set up on or after 1 July 2017 that is involved in innovation-driven activi ties for intellectual property assets developed in Mauritius is exempt from tax from the year the company starts its innovationdriven activities for a period of eight years.

Expenditure on fast charger for electric car. Expenditure on a fast charger used for an electric car used in the production of gross taxable income (essentially turnover before deduction of any expenses) qualifies for a 200% deduction.

Expenditure on medical research and development. A person engaged in medical research and development is eligible to deduct 200% of any expenditure on medical research and development performed in Mauritius. The extra deduction is not avail able if the person has claimed annual allowances on the relevant expenditure.

Expenditure on patents and franchises. A company is allowed to deduct 200% of its expenditure on the acquisition of patents and franchises and the costs to comply with international quality standards and norms.

Manufacturing of pharmaceutical products, medical devices and high-tech products. Income of a company that started operations on or after 8 June 2017 and that is engaged in the manufacturing of pharmaceutical products, medical devices and high-tech prod ucts is exempt from tax for a period of eight years from the year the company begins its operations.

Exploitation and use of deep ocean water. Income of a company from the exploitation and use of deep-sea ocean water for provid ing air conditioning installations, facilities and services is exempt from tax.

Contribution to COVID-19 Solidarity Fund. Contributions made to the COVID-19 Solidarity Fund, which is referred to in the Finance and Audit (COVID-19 Solidarity Fund) Regulations 2020, during the 2019-20 and 2020-21 income years qualify for a deduction in the year in which the contribution is made. Any unrelieved amount may be utilized in the following two years.

Income derived in collaboration with the Mauritius Africa Fund. Income of a company from activities carried out as a developer or project financing institution in collaboration with the Mauritius Africa Fund for the purpose of developing infrastructure in a Special Economic Zone is exempt for a period of five years from the year in which the company begins performing the qualifying activities. A Special Economic Zone is defined as a part of a foreign territory where business activity may be conducted under

preferential terms and which is being developed, managed or promoted by the Mauritius Africa Fund Limited or any of its subsidiaries or affiliates.

Sheltered farming scheme. Income of a person from any activity under the sheltered farming scheme set up by the Food and Agricultural Research and Extension Institute is exempt from income tax for eight years from the year in which the person starts the relevant activity.

Companies engaging in offshore activities. Offshore business activities may be conducted through GBL companies or compa nies holding an Authorized Company License (AC companies). AC companies must conduct their activities outside of Mauritius or with such category of persons as may be specified in the Financial Services Commission (FSC) Rules. For this purpose, the categories of persons specified in the FSC Rules are the fol lowing:

• An AC company

• A holder of a GBL

• A holder of a GBL1 issued on or before 16 October 2017

• A holder of a GBL2 issued on or before 16 October 2017

AC companies must have their central management and control outside of Mauritius.

Mauritian residents, including GBL companies, are eligible for a foreign tax credit on their foreign-source income. The foreign tax credit is generally the lower of the Mauritian tax and the foreign tax. If the shareholding in the foreign company is 5% or more, an underlying tax credit can be claimed. A tax-sparing credit can also be claimed. Dividends paid to residents and nonresidents and royalties paid by GBL companies out of their foreign-source in come to nonresidents are exempt from tax. Interest paid by GBL companies to nonresidents that do not have a place of business in Mauritius is exempt from tax to the extent that the interest is paid out of its foreign-source income. Effective from 1 January 2019, a royalty paid by any company to a nonresident out of its foreignsource income is exempt from tax. GBL1 companies may be considered residents of Mauritius for purposes of double tax trea ties.

Under an amendment to the FSA contained in the FMPA 2018, the FSC no longer issues a Category 1 Global Business License (GBL1) from 1 January 2019; instead, it issues a GBL. A GBL company is required to carry on its core income-generating activities (CIGA) in Mauritius and is required to have its central management and control in Mauritius. It should be administered by a management company. Its CIGA must be carried out in Mauritius as a result of the following:

• The direct or indirect employment of a reasonable number of suitably qualified persons

• The fact that it incurs expenses that are proportionate with to its level of activities

The FSA provides that the CIGA for a company with a GBL is supposed to be in Mauritius, but this should be determined in accordance with the Income Tax Act. However, the Income Tax Act does not require the CIGA for a company with a GBL to be in Mauritius. The Income Tax Act only requires that the CIGA to

be in Mauritius in the context of certain exempt income, such as foreign dividend and interest income.

A GBL is exempt from the CSR rules, and any outgoing interest from its foreign-source income is exempt from tax in Mauritius.

If a GBL1 was issued on or before 16 October 2017, the com pany will be deemed to be a GBL from 1 July 2021; otherwise, it will be deemed to be a GBL from 1 January 2019.

The FSC no longer issues a Category 2 Global Business License (GBL2). The corporate tax exemption for GBL2 companies will terminate on 30 June 2021 if the GBL2 was issued on or before 16 October 2017. The exemption does not apply to income from the following:

• Intellectual property assets acquired from a related party after 16 October 2017

• Intellectual property assets acquired from a third party after 30 June 2018

• New intellectual property assets created after 30 June 2018

• Specific assets acquired or projects started after 31 December 2018, as may be determined by the MRA

A company may be granted the status of Authorized Company by the FSC if all of the following conditions are satisfied:

• A majority of the shares, voting rights or the legal or beneficial interests in the company, other than a bank, are held or controlled by non-Mauritian citizens.

• The company conducts business principally outside of Mauritius or with such category of persons, as may be specified in the FSC Rules.

• The company has its central management and control outside of Mauritius.

An Authorized Company is not supposed to transact in Mauritius. Consequently, it is not generally expected to have Mauritiansource income.

From 1 January 2019, transactions with nonresidents and other GBL companies are not automatically considered to be foreignsource income for GBL1 companies and banks. If a GBL1 has been issued on or before 16 October 2017, the income is consid ered to be foreign-source income up to 30 June 2021. For a bank, the current definition applies up to the 2019-20 year of assessment.

The presumed foreign tax no longer applies from 1 January 2019. Under transitional rules, it will continue to apply to a GBL1 company up to 30 June 2021 if the GBL1 was issued on or before 16 October 2017. This excludes income from the following:

• Intellectual property assets acquired from a related party after 16 October 2017

• Intellectual property assets acquired from a third party after 30 June 2018

• Intellectual property assets created after 30 June 2018

• Specific assets acquired or projects started after 31 December 2018, as may be determined by the MRA

In the case of banks, the presumed foreign tax will continue to apply up to the 2019-20 year of assessment.

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It is no longer possible for certain trusts to deposit a declaration of nonresidence to the MRA that enables such trusts to benefit from an income tax exemption. Under the transitional rules, the exemption continues to apply up to the 2024-25 year of assess ment if the trust was set up before 30 June 2021 and deposits a declaration of nonresidence within three months after the expira tion of the relevant basis year. The transitional rules do not apply to the following:

• Intellectual property assets acquired from a related party after 30 June 2021

• Intellectual property assets acquired from an unrelated party, or such intellectual property assets newly created after 30 June 2021

• Income from such specified asset acquired, or projects started, after 30 June 2021 as may be determined by the MRA

For the purposes of the transitional rules, intellectual property assets include copyrights of literary, artistic or scientific works; patents, trademarks, designs or models; and plans or secret for mulas or processes.

It is no longer possible for a foundation to deposit a declaration of nonresidence to the MRA that enables such trusts to benefit from an income tax exemption. Under the transitional rules, the exemption continues to apply up to the 2024-25 year of assess ment if the foundation was set up before 30 June 2021 and deposits a declaration of nonresidence within three months after the expiration of the relevant basis year. The transitional rules do not apply to the following:

• Intellectual property assets acquired from a related party after 30 June 2021

• Intellectual property assets acquired from an unrelated party, or such intellectual property assets newly created after 30 June 2021

• Income from such specified asset acquired, or projects started, after 30 June 2021 as may be determined by the MRA

For the purposes of the transitional rules, intellectual property assets include copyrights of literary, artistic or scientific works; patents, trademarks, designs or models; and plans or secret for mulas or processes.

Companies engaged in qualifying activities. Companies engaged in dyeing, knitting, spinning, or weaving activities that began their operations before 30 June 2006 are exempt from income tax for a period of up to 10 income years. If a company began operations during the period of 1 July 2006 through 30 June 2008, its income is exempt from income tax up to and including the income year ended 30 June 2016. Losses incurred during the exemption peri od may be carried forward to years following the expiration of the exemption period.

A company that subscribes to the stated capital of a spinning company on or before 30 June 2008 for an amount of MUR60 million or more is granted a tax credit equal to 60% of the investment in share capital over a period of either four or six income years. This tax credit is also granted to a company subscribing to the stated capital of a company engaged in dyeing, knitting and weaving activities on or before 30 June 2008 for an

amount of MUR10 million or more. The credit is available beginning in the income year preceding the income year in which the shares are acquired and is spread equally over the four- or six-year period. Any unused portion of the tax credit may be carried forward to subsequent income years, subject to a maximum period of five consecutive income years beginning with the income year of the investment.

Under an amendment contained in the FMPA 2016, a company that has invested MUR60 million or more or at least 20% in the stated capital of a spinning factory, whichever is higher, during the years of 2003 to 2008 is allowed an investment tax credit (ITC) of either 15% of the investment over a four-year period or 10% of the investment over six years. The credit is allowed from the year the investment is made and is reduced by any credit pre viously claimed with respect to the same investment. A similar form of credit applies to a company that has invested in the stated capital of a company engaged in dyeing, knitting and weaving activities during the same period; the minimum amount of the investment is MUR10 million or at least 20% of the stated capital of the company. The ITC may be carried forward for a consecutive period of six years from the year of the investment and may be applied against any past tax liability; however, no refund is made for tax already paid. The ITC may be set off against the 30% of the tax claimed that was required to be paid for an objection to a notice of assessment to be valid; any excess ITC can be offset against any tax payable from 1 September 2016. The ITC can offset against any past tax liability for any case under dispute. If the ITC is offset against the tax liability for a pending case before any court, judicial or quasi-judicial body, the company should withdraw its case.

Manufacturing companies or companies producing “specified goods or products” can claim a tax credit on the total capital ex penditure incurred on the acquisition of new plant and machinery (excluding motor cars) exceeding MUR100 million during the period of 1 January 2014 through 30 June 2016. The annual tax credit equals 5% of the cost of the plant and machinery. The credit is subtracted from the income tax liability in the year of acquisition and the two subsequent income years. Any unrelieved tax credit with respect to an income year may be carried forward to the following income year. The carryforward applies to a maximum of five consecutive income years following the income year in which the capital expenditure is incurred. The following are the “specified goods or products”:

• Computers

• Electrical equipment

• Film

• Furniture

• Jewelry and bijouterie

• Medical and dental instruments, devices and supplies

• Pharmaceuticals or medicinal chemicals

• Ships and boats

• Textile

• Wearing apparel

For tax purposes, manufacturing activities include the following:

• The assembly of parts into a piece of machinery or equipment or other product

• Retreading of used tires

Recycling of waste

Under an amendment contained in the FMPA 2016, companies engaged in manufacturing activities or companies producing the “specified goods or products” are also allowed a credit in the year of acquisition and the subsequent two years at the following rates for capital expenditure incurred on the following new assets dur ing the period from 1 July 2016 through 30 June 2020.

Asset Rate of credit

Computers

or optical

equipment

and bijouterie

and dental instruments,

supplies

and boats

Wearing apparels

or medicinal chemicals

Any excess credit may be carried forward to the next year. However, the credit cannot be used in a period beyond 10 years following the year in which the capital expenditure is incurred. If the asset is sold within five years from the date of its acquisition, the credit is clawed back.

A company that invests in the share capital of a subsidiary com pany engaged in the setting up and management of an accredited business incubator is allowed to claim a credit in the year of in vestment and the subsequent two years. The credit equals 15% of the amount invested, subject to a maximum amount of MUR3 million. Any excess can be carried forward to the next income year and is clawed back if the shares are disposed of within five years after the year of the investment.

Income of a company incorporated on or after 1 July 2021 and holding an Investment Certificate issued by the EDB is exempt for a period of eight succeeding years from the year the company is incorporated.

Income of a corporation holding a Family Office (Single) Licence or a Family Office (Multiple) Licence issued on or after 1 September 2016 by the FSC is exempt from tax for a period of 10 years from the year the corporation was granted the license, provided that the income is from activities covered under the relevant license and the corporation satisfies the conditions of minimum employment and the substance of its activities as specified by the FSC.

Partial exemption. Eighty percent of the following types of income is exempt from tax from 1 January 2019:

• Foreign dividends

• Interest income received by companies, other than banks

Profits attributable to a foreign permanent establishment

Leasing of ships, aircrafts, locomotives and trains, including rail leasing

• Income of a collective-investment scheme (CIS), closed-end fund, CIS manager, CIS administrator, investment advisor, investment dealer or asset manager, set up under the Financial Services Act

• Income of a company from reinsurance and reinsurance broker ing activities

• Income of a company from the leasing and provision of inter national fiber capacity

• Income of a company from the sale, financing arrangement and asset management of aircraft and its spare parts, and related aviation advisory services

The exemption for foreign dividend income applies only if all of the following conditions are satisfied:

• The dividend has been treated as nondeductible in the state of source.

• The receiving company has satisfied its compliance obligations under the Companies Act or the FSA.

• The company must have adequate resources to hold and man age share participations.

The exemption for interest income and ship and aircraft leasing income applies only if all of the following conditions are satis fied:

• The company carries on its core income-generating activities in Mauritius.

• The company employs directly or indirectly an adequate num ber of suitably qualified persons to conduct its core incomegenerating activities.

• The company incurs a minimum level of expenditure propor tionate with its level of activities.

If a company outsources any relevant activities to third party service providers, the company should be able to demonstrate adequate monitoring of the outsourced activities. The outsourced activities should be conducted in Mauritius. The economic sub stance of the service providers is not counted multiple times by multiple companies.

A company may opt to apply the credit system instead of the partial exemption if the income has been subject to foreign tax.

Other tax exemptions. Income derived from the operation of an e-commerce platform by a company set up on or before 30 June 2025 and issued an e-commerce certificate by the EDB is exempt from income tax for a period of five years as from the year the company starts its operations provided that the company satisfies such conditions as may be prescribed relating to its substance requirements.

Income derived from the operation of a peer-to-peer lending platform by a person operated under a license issued by the FSC under the FSA is exempt from income tax for a period of five years if the following conditions are satisfied:

• The person started their operations before 31 December 2020.

• The income is from the activities covered by the license.

• The person satisfies the conditions relating to the substance of its activities as specified by the FSC.

Other tax benefits

Tax credit on new plant and machinery. A company engaged in the importation of goods in semi-knocked down form can benefit from a tax credit of 5% on the expenditure incurred on any new plant and machinery during the period from 1 July 2018 to 30 June 2020. The credit applies in the year the capital expendi ture is incurred and in the following two years. The credit does not apply if the local value addition incorporated in the goods is less than 20%. Expenditure on motor cars does not qualify for the credit.

If a manufacturing company incurs capital expenditure on new plant and machinery, excluding motor cars, during the period of 1 July 2020 to 30 June 2023, it is entitled to a tax credit of 15% of the total cost in the year of acquisition and the two subsequent years. Any unutilized tax credit may be carried forward to the subsequent year up to a maximum of 10 years following the year the capital expenditure is incurred.

Tax credit to medical, biotechnology or pharmaceutical compa nies. A manufacturing company engaged in the medical, biotech nology or pharmaceutical sector is entitled to a tax credit based on the capital expenditure incurred on the acquisition of patents. Any unutilized tax credit can be carried forward to subsequent years up to a maximum of five years. The tax credit is withdrawn in total or in part if within five years of the year of acquisition the company ceases to be engaged wholly or mainly in the qualifying activity or the company sells or otherwise transfers the patents.

Additional investment allowance to companies affected by the COVID-19 pandemic. A company that has incurred capital expenditure on the acquisition of new plant and machinery, excluding motor cars, during the period from 1 March to 30 June 2020 is entitled to 100% additional investment allowance pro vided that it satisfies the MRA that it has been adversely affected by the COVID-19 pandemic.

Extra deduction for emoluments for homeworkers. An extra deduction (that is, the expense is effectively relieved twice for corporate income tax purposes) applies to employers that have full-time homeworkers if the following conditions are satisfied:

• The employer has acquired the necessary information technol ogy system to enable the worker to work from home.

• The employer has more than five homeworkers at any time dur ing the year.

• The monthly emoluments do not exceed MUR100,000.

• The homeworker started to work from home on or after 1 July 2018.

• The emoluments relate to July 2018 or a later month and apply for a period not exceeding 24 months.

Tax credit on information technology system. A tax credit applies to expenditure incurred on an information and technology system for the purpose of employing homeworkers. The credit equals 5% of the expenditure incurred and can be claimed in the year the capital expenditure is incurred and in the following two years.

Investment in nurseries. An expenditure by a company on nurser ies is eligible for a 200% deduction.

Capital gains. Capital gains are not subject to income tax. The Finance (Miscellaneous Provisions) Act 2010 (FMPA 2010) intro duced a capital gains tax regime for transactions in immovable properties or interests in immovable properties; however, it was repealed by the Finance (Miscellaneous Provisions) Act 2011, effective from 5 November 2011.

Withholding taxes. Withholding taxes apply to certain payments. The tax withheld at source is an interim tax payment that may or may not be the final tax liability. Amounts deducted are credited to the final tax liability of the taxpayer for the relevant tax year.

The following are the withholding tax rates.

Payment

Rate (%) (a)

Interest 15 (b)

Royalties 10/15 (c)

Rent for buildings 5

Commission 3

Payments to contractors and subcontractors 0.75

Payments to accountants or accounting firms, architects, attorneys, barristers, engineers, land surveyors, legal consultants, medical service providers, project managers in the construction industry, property valuers, quantity surveyors, solicitors, tax advisors and their representatives 3 Payments made by a ministry, government department, local authority, statutory body or the Rodrigues Regional Assembly on contracts, other than payments to contractor and subcontractors and payments to service providers specified in the preceding entry above

For the procurement of goods and services under a single contract, if the payment exceeds MUR300,000 1

For the procurement of goods under a contract, if the payment exceeds MUR100,000 1

For the procurement of services under a contract, if the payment exceeds MUR30,000 3 Payments made to the owner of immovable property or agent, other than a hotel, unless the payments are made to a body of persons specified in Part I of the Second Schedule or a person exempt from income tax as a result of any other enactment, by a tour operator or travel agent, other than an individual, an Integrated Resort Scheme (IRS) or Real Estate Development Scheme (RES) company or a provider of property management services designated by an IRS or RES company, under the Investment (Real Estate Development) Regulations 2007, or any other agent, other than an individual, carrying on the business of providing services with respect to the leasing of properties 5

Payment Rate (%)

Payments made to nonresidents for services rendered in Mauritius

Payment of management fees

To residents

To nonresidents

Payments to nonresident entertainers or sportspersons

(a) The withholding taxes do not apply to a company, partnership or succession (estate of a deceased person) with an annual turnover MUR6 million or less, except for the award of a contract for construction works.

(b) This withholding tax applies to interest paid by any person, other than by a bank or nonbank deposit-taking institution under the Banking Act, to any person, other than a company resident in Mauritius.

(c) This withholding tax is imposed on residents and nonresidents. The withhold ing tax rate is 10% for residents and 15% for nonresidents. For a recipient of royalties that is resident in a treaty country, the treaty rate applies if it is lower than 15%. The treaty rate does not apply if the royalty is paid out of the for eign-source income of a company.

If a recipient of a payment proves to the Director-General of the MRA that the recipient is not liable for tax, the Director-General may, by written notice to the payer, direct that no tax be withheld from the payment to the recipient.

Administration. The income year is 1 July to 30 June of the year preceding the year of assessment. Companies may choose a finan cial year-end other than 30 June for tax purposes. The income year-end was previously 31 December.

Companies are generally required to file their tax returns within six months after their year-end. If the year-end of a company is 30 June and if the company does not have any tax payable, the tax return can be submitted by 15 January of the following year. A company with a 30 June year-end may submit its annual tax re turn by 31 January in the following year if it has submitted and paid tax for the quarter ending on 30 June.

The FMPA 2016 contains a section on amended tax returns. Under this section, an amended tax return is not allowed if it is submitted more than three years from the end of the year of as sessment to which the return relates. The time limit of three years does not apply if the company has underdeclared its income. If an amended tax return is filed, the return for the relevant year is deemed to have been made on the date on which the amended tax return is made. As a result, interest and penalties may apply.

Any tax payable in accordance with the annual return must be paid at the time of filing the return. The Advance Payment System (APS) requires companies to pay tax electronically on a quar terly basis. For purposes of the APS, companies can either use the taxable profits of the preceding tax year or the results of the rel evant quarter. A company with annual turnover of MUR10 mil lion or less is not required to pay tax under the APS. The APS requirement also does not apply if the company did not have any chargeable income in the preceding year. Under an amendment contained in the FMPA 2016 with respect to CSR, APS also ap plies to the contributions that must be made to the National CSR Foundation.

Any company that is engaged in any activity in the tourism sector specified in Part I of the Income Tax Regulations and that has an accounting period ended on any date during the period September 2019 to June 2020 is required to pay half of its tax on or before 29 December 2020 and the remainder on or before 28 June 2021. The same time limit applies to any quarterly tax payment. The companies that are within the scope of Part I of the Income Tax Regulations include hotels, guest houses, travel agencies and amusement parks.

If a payment is late or an incorrect return is filed, a penalty of 5% of the tax payable is imposed. The penalty is reduced to 2% if the taxpayer is a small enterprise with an annual turnover of less than MUR10 million. Interest at a rate of 0.5% for each month or part of a month the tax remains unpaid also applies. In addition, a penalty of MUR2,000 is imposed for each month or part of a month that the annual tax return is late. The penalty is limited to a maximum amount of MUR20,000. The maximum penalty is reduced to MUR5,000 if the taxpayer is a small enterprise with an annual turnover of less than MUR10 million.

After the MRA issues a notice of assessment, the taxpayer may object to the assessment. For an objection to be valid, 10% of the total tax claimed must be paid to the MRA. If the MRA is satis fied that the taxpayer cannot pay the 10% tax, a bank guarantee may be provided. If a notice of determination is issued by the objection department of the MRA, written representations may be made to the Assessment Review Committee. In such a case, 5% of the amount determined in the notice of determination should be remitted to the MRA.

Dividends. Dividends paid to residents and nonresidents are ex empt from tax. Dividends should be paid in either cash or shares.

Foreign tax relief. Residents of Mauritius may claim a foreign tax credit (FTC), regardless of whether they may claim other tax credits. The FTC equals the lower of the Mauritian tax liability and the amount of the foreign taxes. In computing the FTC, all foreign-source income may be pooled. An underlying FTC is also available if the residents, including individuals and trusts, own directly or indirectly at least 5% of the share capital of the foreign company. The underlying FTC is extended to all previous tiers. The FTC takes into account any tax sparing credits granted to the payer of the dividends.

C. Determination of trading income

General. Taxable income of resident companies and foreign branch es comprises gross income less cost of goods sold and expenses incurred exclusively in the production of income, unless specifi cally excluded by law. Income and expenses are determined in accordance with generally accepted accounting principles. The levy imposed in accordance with Section 114 of the Gambling Authority Act is not deductible.

Inventories. Inventories may be valued according to International Accounting Standard 2. However, the income tax rules provide that the last-in, first-out (LIFO) method of valuation may not be used.

Provisions. No provisions are allowed for tax purposes.

Tax depreciation. No deduction is allowed for book depreciation of non-current assets, but statutory depreciation (capital allow ances) is granted. Mauritian law provides for investment allow ances and annual allowances. However, the investment allowance and the additional investment allowances have been repealed and are now available only in limited cases under transitional rules.

Under the transitional rules, a company whose application has been approved under the Investment Promotion Act, or whose proposed activity has been approved under any other enactment, may elect by irrevocable notice in writing to the Director-General to claim annual allowances for capital expenditure incurred on or before 30 June 2009 at the rates prevailing on 30 June 2006.

Manufacturing companies may claim additional investment al lowances on state-of-the-art technological equipment for acquisi tions made in the years ended 30 June 2007 and 30 June 2008. ICT companies may claim additional investment allowances on computer equipment and plant and machinery for acquisitions made on or before 30 June 2008.

The following investment allowances are provided.

Allowance Rate (%)

Investment allowance on certain new assets, including industrial buildings, office equipment, plant and machinery, and buses with a seating capacity of at least 30 25

Additional investment allowance for a manufacturing company that has incurred capital expenditure on the acquisition of state-of-the-art technological equipment in the year ended 30 June 2008 10

Additional investment allowance for an ICT company that incurs capital expenditure on the acquisition of new plant and machinery or computer software 25

The following are the rates of annual allowances computed using the declining-balance method.

Asset Rate (%)

Hotels 30

Plant and machinery 35 Heavy equipment (such as agricultural tractors or excavators) 35 Computer hardware, peripherals and computer software 50 Motor vehicles 25

Setting up of golf courses 15

The following are the rates of annual allowances computed using the straight-line method.

Asset Rate (%)

Commercial premises 5 Green technology equipment 50

Landscaping and other earthwork for embellishment purposes 50

Industrial premises excluding hotels 5

Asset Rate (%)

Any item of a capital nature not listed above that is subject to depreciation under the normal accounting principles 5

Plant and machinery costing MUR60,000 or less 100 Aircraft and aircraft simulators leased by aircraft leasing companies 100 Electronic, high-precision machinery or equipment and automated equipment 100

The following are the rates of annual allowances for capital expen diture incurred during the period from 1 January 2013 through 30 June 2018.

Asset Rate (%)

Industrial premises dedicated to manufacturing 30 Plant and machinery costing MUR60,000 or less 100 Electronic and high-precision equipment 50 Plant and machinery, except passenger cars, acquired by a manufacturing company 50 Scientific research 50

Except for the annual allowance rates on industrial premises, the above rates will be applied on a straight-line basis.

For the purposes of the annual allowances, green technology equipment includes the following types of equipment:

• Renewable energy equipment

• Energy-efficient equipment or noise-control devices

• Water-efficient plant and machinery and rainwater harvesting equipment and systems

• Pollution-control equipment or devices, including wastewater recycling equipment

• Effective chemical hazard control devices

• Desalination plant

• Composting equipment

• Equipment for shredding, sorting and compacting plastic and paper for recycling

• Equipment and machinery used for eliminating, reducing or transforming industrial waste

Any unused annual allowances that arise as a result of the above increased rates can be carried forward indefinitely. Expenditure on passenger cars is not eligible for increased annual allowances.

Capital allowances are subject to recapture on the sale of an asset to the extent the sales price exceeds the tax value after depreciation. Amounts recaptured are included in ordinary income and are subject to tax at the normal tax rate. To the extent that the sales price is lower than the depreciated value, an additional allowance is granted.

Under an amendment contained in the Finance (Miscellaneous Provisions) Act 2010, the total annual allowances on a motor car cannot exceed MUR3 million. The MUR3 million cap does not apply to persons engaged in the business of tour operator or car rental.

Expenditure on deep ocean water air conditioning. Expenditure on deep ocean water air conditioning is eligible for a 200% deduc tion over a period of five years from the year of the incurrence of

the expenditure. This measure is effective as from 1 July 2017. A tax loss resulting from expenditure on deep ocean water air conditioning is not subject to the five-year restriction on the utiliza tion of tax losses (see Relief for losses).

Expenditure on water desalination plant. Expenditure on the acquisition and setting up of a water desalination plant is eligible for a 200% deduction from 1 July 2017. A tax loss that results from expenditure on a water desalination plant is not subject to the five-year restriction on the utilization of tax losses (see Relief for losses).

Research and development. Any qualifying expenditure on research and development (R&D) incurred during the period of 1 July 2017 through 30 June 2027 (the qualifying period) is eli gible for a 200% deduction if the relevant expenditure is directly related to an existing trade or business and if the R&D is carried on in Mauritius. If the qualifying expenditure incurred during the qualifying period does not relate to an existing trade or business, the MRA may allow the expenditure. The qualifying expenditure relates to any R&D and specifically includes expenditure on innovation, improvement or development of a process, product or service, staff costs, consumable items, computer software direct ly used in R&D and subcontracted R&D. The time limit of five years on the utilization of tax losses does not apply to a tax loss resulting from the 200% deduction.

Expenditure on cleaning, renovation and embellishment works. A company operating a hotel can deduct 150% of any expenditure on cleaning, renovation and embellishment work in the public realm.

Expenditure on arbitration, conciliation or mediation under an Alternative Dispute Resolution Mechanism. Expenditure on filing fees for the purposes of filing a request for arbitration, concilia tion or mediation is eligible for 150% deduction if the application is made to a recognized arbitration institution, such as the Mauritius International Arbitration Centre, the Mauritian Chamber of Commerce and Industry Arbitration and Mediation Centre or the Mediation Division of the Supreme Court of Mauritius.

Expenditure incurred by manufacturing companies on products manufactured locally by small enterprises. Expenditure on the direct purchase of products manufactured locally by small and medium enterprises whose yearly turnover does not exceed MUR50 million is eligible for an extra deduction of 10% of the expenditure incurred.

Expenditure on international accreditation. A company registered as a health institution under the Private Health Institutions Act is eligible for an extra deduction on any expenses incurred on inter national accreditation.

Expenditure on market research and product development for the African market. A manufacturing company is eligible for an extra deduction on any expenditure on market research and product development for the African market.

Expenditure on specialized software and systems. Expenditure incurred on the acquisition of specialized software and systems

by a company is eligible for a 200% deduction provided that the company has not treated the software as an asset for tax purposes.

The new regulation broadly provides the following:

• The amount eligible for the extra deduction

• Timing of expenditure

• Use of the software

• Components of the software

• Cases in which software is considered as specialized software (positive list)

• Cases in which software is not considered as software (negative list)

The new regulations provide that the specialized software must meet the following conditions:

• It must be acquired on or after 1 July 2021.

• It must be used in business for income-producing activities.

• It must have a lifetime exceeding one year.

The term software comprises the following:

• Non-customized software available to the general public under a non-exclusive license

• Software acquired from a third-party contractor who is at eco nomic risk should the software not perform

• Software that is leased

• Such other type of software as may be approved by the Minister of Finance and Economic Development

The eligible deduction shall be with respect to the cost of the following:

• Purchase or lease of the software

• Installation of the software on the taxpayer’s computer hardware

• Configuration of the software to the taxpayer’s needs

The expenses qualifying for the extra deduction must exceed MUR100,000, with a maximum of MUR100 million in any year.

Positive list. Specialized software includes software used in rela tion to the following:

• Additive manufacturing

• Optimization of manufacturing processes, including production planning and execution

• Robotics

• Artificial intelligence

• Simulation

• Augmented and virtual reality

• Horizontal and vertical system integration

• Industrial internet of things

• Cybersecurity

• Big data and analytics, including efficient data sharing

• Cloud technology

• Digitization outreach to customers

• Enable work from home

• Improve energy efficiency

• Engineering tools

• Product lifecycle management

Negative list. Qualifying expenditure for the double deduction does not include expenditure on the following:

• Hardware

Operating system software

Software performing general and administrative functions such

payroll, bookkeeping, personnel management, spreadsheets, word processing, presentation tools

providing non-computer services such as accounting, banking services and auditing

Programming software

Database software

Basic enterprise resource planning and customer relationship management software

Websites

Mobile applications

Gaming software, including computer games

Point-of-sale system

Relief for losses. Losses can be offset against future corporate income in the following five income years. Losses attributable to annual allowances claimed with respect to assets acquired on or after 1 July 2006 can be carried forward indefinitely. Losses may not be carried back. Under an amendment contained in the FMPA 2016, the claiming of an excess loss is subject to a penalty of 5% of the excess amount.

If a company takes over a company engaged in manufacturing activities or if two or more companies engaged in manufacturing activities merge into one company, any unrelieved losses of the acquired company or merging companies may be transferred to the acquirer or to the company resulting from the merger in the income year of the takeover or merger, subject to certain condi tions relating to the safeguarding of employment or to such other terms and conditions that may be established by the MOFED. The loss transferred is withdrawn if, within three years from the date of the takeover or merger, more than 50% of the employees is made redundant. The FMPA 2016 extended the scope of this provision to a transaction in which a company takes over or ac quires the whole or part of the undertaking of another company if the MOFED has deemed such transaction to be in the public interest. If a change of more than 50% in the shareholding of a manufacturing company occurs, the tax loss may nevertheless be carried forward if the MOFED certifies that the change in the shareholding is in the public interest and is satisfied that there is compliance with the conditions relating to the safeguard of em ployment. In addition, if there is a change in the shareholding of more than 50% in a manufacturing company or in a company facing financial difficulty, any unrelieved tax loss may be carried forward if the MOFED is satisfied that the conditions relating to the safeguard of employment or other conditions that the MOFED may impose are complied with by the company.

D. Other significant taxes

Nature of tax Rate

Employee contribution

Monthly salary up to MUR50,000

Monthly salary more than MUR50,000

Land transfer tax; payable by transferor based on the value of the immovable property transferred; also applies to transfers of shares that result in a change in control of a company that owns immovable property

Tax on transfer of leasehold rights in state land; based on the open market value of the leasehold rights; payable equally by the transferor and the transferee 20 Registration duty; payable on the registration of certain transactions, such as the sale of land; based on the value of the property transferred; payable by the transferee; certain transactions are not subject to the duty

E. Miscellaneous matters

Foreign-exchange controls. The Exchange Control Act was sus pended in 1993. Consequently, approval of the Bank of Mauritius is no longer required for transactions involving foreign exchange.

Anti-avoidance legislation. Anti-avoidance provisions apply to interest on debentures issued by reference to shares, excessive remuneration to shareholders or directors, benefits to sharehold ers, excessive management expenses, leases with inadequate rent, rights over income retained and other transactions designed to avoid tax liability. Certain of these items are discussed below.

Interest on debentures issued by reference to shares. If a company issues debentures in the proportion of shares held by each share holder, the interest on the debentures is treated as a dividend and is therefore not an allowable deduction for the company. The 2004 Finance Act provides that such interest on the debentures is not treated as a dividend for the shareholder.

Benefits to shareholders. If a benefit of any nature, whether in money or money’s worth, is granted by a company to a share holder or a party related to the shareholder, the value of the benefit is deemed to be a taxable benefit in the hands of the shareholder or the related party.

Rights over income retained. If a person transfers property or any right to income to a related party and retains or obtains power to enjoy income from the property or the right, the income is deemed to be derived by the transferor.

Controlled foreign companies. A foreign entity is considered to be a controlled foreign company (CFC) if its non-distributed income arises from non-genuine arrangements that have been implemented for the essential purpose to obtain a tax benefit. A foreign company is considered to be a CFC if more than 50% of its participation rights are held directly or indirectly by the Mauritian resident company and its “related parties.” For this purpose, related parties are the following:

• An entity in which the Mauritian resident company holds directly or indirectly a participation of voting rights, capital or entitlement to profit of at least 25%

• An individual or entity that holds directly or indirectly a par ticipation of the voting rights or capital ownership in the company of at least 25% of the profits of the company

The income to be attributed to the Mauritian resident company should be consistent with the arm’s-length principle and be lim ited to the assets and risks linked to the significant people functions carried on by the controlling company. The foreign tax credit applies in connection with any foreign tax suffered by the CFC.

A company is not regarded as a CFC if any of the following conditions are satisfied:

• The accounting profit and non-trading income are both less than EUR750,000.

• The accounting profit is less than 10% of its operating costs.

• The tax rate in the country of residence of the CFC is more than 50% of the tax rate in Mauritius.

COVID-19 Levy. A company that has benefited from the allow ance under the Wage Assistance Scheme is required to repay the allowance through the COVID-19 Levy over a period of two years. The levy is restricted to a maximum of 15% of the taxable profits of the company before any tax loss brought forward.

F. Treaty withholding tax rates

Under Mauritian domestic law, dividends paid to resident and nonresident shareholders are exempt from tax. Royalties payable to nonresidents are exempt from tax insofar as the royalties are payable to a nonresident out of the foreign-source income of a company. Interest payments are exempt from tax if they are paid by Mauritian banks or GBL companies to nonresidents out of their foreign source income to nonresidents that do not have a place of business in Mauritius. The table below lists the tax rates for dividends, interest and royalties under the tax treaties entered into by Mauritius. However, Mauritian domestic law prevails if it exempts the payments from tax.

Recipient’s country Dividends Interest Royalties of residence

Barbados

Botswana

Cape Verde

Mainland

Comoros

Congo (Republic of)

(l)

(j)

(f)

12.5

7.5

(z) 0/5 (z)

(f) 15 (g)

(f)

(f)

Recipient’s country Dividends Interest Royalties of residence % % %

Jersey 0 0 0

Kuwait 0 0 10

Lesotho 10 10 10

Luxembourg 5 (a) 0 0

Madagascar 5 (h) 10 5

Malaysia 5 (a) 15 (f) 15

Malta 0 0 0

Monaco 0 0 0

Mozambique 8/10/15 8 (f) 5

Namibia 5/10 10 (f) 5

Nepal 5/10/15 (o) 10/15 (p) 15 Oman 0 0 0

Pakistan 10 10 12.5

Qatar 0 0 5

Russian Federation (l) 5 (k) 0 0

Rwanda 10 10 10

Seychelles 0 0 0 Singapore 0 0 0

South Africa 5/10 (t) 0/10 (u) 5

Sri Lanka 10 (a) 10 10

Swaziland 7.5 5 7.5

Sweden 0 (i) 0 0

Thailand 10 10/15 5/15

Tunisia 0 2.5 2.5 Uganda 10 10 10 United Arab Emirates 0 0 0

United Kingdom 10 (c) 15 (f) 15 (d) Zambia (y) 5 (q) 10 5 Zimbabwe 10 (e) 10 (f) 15 Non-treaty jurisdictions 0 0/15 (m) 0/15 (n)

(a) Applicable if the recipient has a direct shareholding of at least 10% of the capital of the Mauritian company; otherwise, the rate is 15%.

(b) Applicable if the recipient has a direct shareholding of at least 25% of the capital of the Mauritian company; otherwise, the rate is 15%.

(c) Applicable if the recipient has a direct or indirect shareholding of at least 10% of the capital of the Mauritian company; otherwise, the rate is 15%.

(d) The reduced rate applies only if the royalties are subject to tax in the United Kingdom.

(e) Applicable if the recipient controls directly or indirectly 25% of the voting power of the Mauritian company; otherwise, the rate is 20%.

(f) The rate is 0% if the interest is paid to a bank resident in the treaty country (subject to additional conditions) and, under the France treaty, if the loan is made or guaranteed by the Banque Française du Commerce Extérieur.

(g) The rate is 0% for literary, artistic or scientific copyright royalties and for royalties for the use of motion picture films or works recorded for broadcast ing or television.

(h) Applicable if the recipient is the beneficial owner of the dividends and if the payer of the dividends is a venture capital company; otherwise, the rate is 10%.

(i) Applicable if the recipient is a company that holds at least 10% of the voting power of the company paying the dividends. Otherwise, the rate is 15% if the shareholder is the beneficial owner of the dividend income. The limitationsof-benefits clause of the tax treaty should be considered.

(j) Applicable if the recipient has a direct or indirect shareholding of at least 25% of the capital of the Mauritian company; otherwise, the rate is 10%.

(k) Applicable if the recipient has invested at least USD500,000 in the authorized capital of the payer of the dividends; otherwise, the rate is 10%.

(l) This treaty has been signed, but it has not yet been ratified.

(m) Interest paid by GBL1 companies to nonresidents or by Mauritian banks to nonresidents is exempt. Interest paid by other resident companies to nonresi dents is taxed at a rate of 15%.

(n) Royalties paid by GBL1 companies to nonresidents are exempt from tax. Royalties paid by other companies to nonresident companies are subject to tax at a rate of 15%.

(o) The 5% rate applies if the recipient of the dividends holds directly at least 15% of the capital of the payer. The 10% rate applies if the recipient of the dividends holds directly at least 10%, but less than 15%, of the capital of the payer. The 15% rate applies to other dividends.

(p) The 10% rate applies if the recipient of the interest is a financial institution or an insurance company. The 15% rate applies to other interest payments.

(q) The 5% rate applies if the recipient is a company that owns at least 25% of the share capital of the paying company. Otherwise, the rate is 15%.

(r) The 5% rate applies if the recipient is a company with a shareholding of at least 10%. Otherwise, the rate is 15%.

(s) The 5% rate applies if the recipient owns less than 25% of the company pay ing the dividends.

(t) The 5% rate applies if the recipient is a company with a shareholding of at least 10%. Otherwise, the rate is 10%.

(u) The 0% rate applies if the interest arises on a debt instrument listed on the Stock Exchange of Mauritius, the Johannesburg Stock Exchange or any other stock exchange agreed to by the competent authorities of the contracting states.

(v) The 5% rate applies if the recipient is a company with a direct or indirect shareholding of at least 25% in the share capital of the paying company. Otherwise, the rate is 10%.

(w) The 5% rate applies if the recipient is the beneficial owner of the dividends and owns less than 25% of the share capital of the company.

(x) The 5% rate applies if the recipient is a company with a direct shareholding of at least 10% in the share capital of the paying company. Otherwise, the rate is 7.5%.

(y) The tax treaty has been terminated and the year ending 30 June 2021 is the last year of application in Mauritius.

(z) The right to tax rests with the country of residence if the recipient is a com pany. Interest is not subject to tax in Estonia if it is paid to the following:

• The government of Mauritius or a local authority thereof

• The Bank of Mauritius

• Any institution wholly or mainly owned by the Republic of Mauritius as may be agreed from time to time by the competent authorities of the con tracting states

Interest is not subject to tax in Mauritius if it is paid to the following:

• The government of Estonia or a local authority thereof

• The Bank of Estonia

• The Rural Development Foundation

• The Foundation KredEx

• The Enterprise Estonia Foundation

• Any institution wholly or mainly owned by the government of Estonia as may be agreed from time to time between the competent authorities of the contracting states

Interest is also exempt from tax in Estonia or Mauritius, as the case may be, if is paid to an investment fund established in and supervised by the state of Estonia or Mauritius, as the case may be.

Tax treaties with Angola, Côte d’Ivoire, Gambia, Gibraltar and Malawi await signature. Mauritius is negotiating tax treaties with Algeria, Burkina Faso, Canada, the Czech Republic, Greece, the Hong Kong Special Administrative Region, Iran, Mali, Montenegro, Portugal, St. Kitts and Nevis, Saudi Arabia, Senegal (to replace the existing treaty), Spain, Sudan, Tanzania, Turkey, Vietnam, Yemen and Zambia (to replace the existing treaty; also, see footnote [y] above).