Taysun Corporate Services Ltd

Taxation & Tax Situation

Taxation

  • GBC1 companies are resident in Mauritius for tax purposes.
  • There are no capital gains tax, and no withholding tax on payment of dividends, interests or royalties.
  • No stamp duties or capital taxes.
  • No inheritance tax.
  • GBC1 companies are liable to taxes at the rate of 15% (effective rate of 3%)


Tax Situation

  • Provided that the GBC1 owns at least 5% of an underlying company, credit will be available on foreign tax paid on the income out of which the dividend was paid ('underlying foreign tax credit').
  • When a company not resident in Mauritius, which pays a dividend, has itself received a dividend from another company not resident in Mauritius (a 'secondary dividend') of which it owns either directly or indirectly at least 5% of the share capital, such dividend will be allowable as foreign tax credit and an underlying foreign tax credit will also be available.
  • Interest and royalty payments paid by GBC1 companies are tax exempt.
  • Tax sparing credits are available. Under this regime the effective rate of taxation in Mauritius can be reduced from the effective rate of tax in Mauritius from 15% to 3% by enjoying tax credit at 80% of the normal tax rate of 15%.


Tax Residency

A Category 1 Global Business Company wishing to benefit from the tax relief under the Double Taxation Avoidance Agreements requires a Tax Residence Certificate (TRC), which is issued by the Commissioner of Income Tax in Mauritius. To be tax resident, the company must demonstrate that the 'effective management and control' is in Mauritius.

To satisfy this test the applicant company is required to:
  • Have at least two resident directors in Mauritius.
  • Chair and initiate Board Meetings from within Mauritius.
  • Maintain an account with a local bank through which funds must flow.
  • Maintain its registered office and all statutory records in Mauritius.
  • Have a local qualified company secretary.
  • Have a local auditor.

Investors should ensure that the above relevant conditions are also satisfied in the country of investment to guarantee eligibility of DTA benefits.


Double Taxation Avoidance Agreements (DTAAs)

Mauritius has an extensive network of Double Taxation Avoidance Agreements (DTAAs) which include: Barbados, Belgium, Botswana, China, Croatia, Cyprus, France, Germany, India, Indonesia, Italy, Kuwait, Lesotho, Luxembourg, Madagascar, Malaysia, Mozambique, Namibia, Nepal, Oman, Pakistan, Rwanda, Senegal, Seychelles, Singapore, South Africa, Sri Lanka, State of Qatar, Swaziland, Sweden, Thailand, Tunisia, Uganda United Arab Emirates, United Kingdom and Zimbabwe .
The network provides for interesting tax planning opportunities thereby enhancing the image of the jurisdiction as a tax planning centre.

The attractive concessions provided by those treaties include:
  • Elimination of double taxation through tax credit equivalent to Mauritian tax.
  • Reduction in withholding taxes on dividends, interest and royalties.
  • Exemption from capital gains.
  • Possible exemption on interest payments on loans.