Authentic Mauritius taxation

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The concept of taxation dates back centuries and has evolved over time. In most modern societies, taxation is based on the principle of progressive taxation, where individuals with higher incomes are subject to higher tax rates. The specific methods and rates of taxation vary from country to country, but common forms include income tax, sales tax or value-added tax (VAT), property tax, and corporate tax.

Who is liable to Income Tax in Mauritius?

A person resident in Mauritius is liable to tax on the worldwide income derived by him.
A non-resident is liable to tax on income derived from sources in Mauritius

According to the recent research done by Mauritius Revenue Authority the Corporate Tax Rate in Mauritius stands at 15 percent. Corporate Tax Rate in Mauritius averaged 19.70 percent from 1999 until 2023, reaching an all time high of 35.00 percent in 2000 and a record low of 15.00 percent in 2008 imposition of Tax. Businesses with an Income such as business profits, interest, royalty, foreign dividends and rent are also subjected to chargeable tax.

As of July 1, 2008, the corporate income tax base rate is 15%. Companies with a Category 1 Global Business License (GBC1) are subject to a 15% domestic-source income tax rate. However, foreign tax credit equal to the greater of the actual foreign tax paid or a presumptive tax credit equal to 80% of the Mauritius tax assessed regarding that income would be available against Mauritius tax due on income from foreign sources.

Therefore, the highest tax rate that applies to GBC1s’ foreign-source revenue is 3%. In addition, no Mauritius tax will be due in cases where it can be demonstrated that actual foreign tax on foreign-source income was paid at a rate of 15% or higher.

Resident companies are subject to tax in Mauritius on worldwide income whereas non-resident companies are subject to tax in Mauritius only on income derived from Mauritius. With a 3% corporate income tax rate that is only applicable chargeable income attributable to export goods (including paper trading. Applicable on chargeable income attributable to manufacturing companies engaged in medical, pharmaceutical sector and holding an Investment Certificate subject issued by EDB.

It is placed as a Corporate Income tax rate which is a tax collected from companies. Its amount is based on the net income companies obtain while exercising their business activity, normally during one business year. The benchmark they use refers to the highest rate for Corporate income. Revenues from the Corporate Tax Rate are an important source of income for the government of Mauritius.

Multiple business owners look to start businesses in Mauritius due to their low taxed income rates. Network opportunities are brought about for Business Owners in Mauritius through The Business Exchange office spaces housing multiple local and international businesses in their co-working office space, a starting point for many looking to enjoy tax benefits from this country.

Places you can find multiple growing business are The Business Exchange located in Quatre Bornes. The kind of businesses with an exquisite character that without continued growth, such operations will stagnate. It’s important to note that the impact of tax rates on a business can vary widely depending on factors such as industry, location, size, and legal structure. Additionally, tax planning and strategies can help mitigate the adverse effects of high tax rates and optimize a businesses financial position.

Therefore, businesses often engage tax professionals and financial advisors to navigate the complexities of tax planning and compliance. Businesses are often required to provide, confirm or share tax clearance information to another entity. This is because proof of tax compliance is an indicator of a company’s good standing in terms of its legal obligations and how well it is managed. There may be instances when an individual, another company, or a government entity needs to verify your tax compliance status, for example, during a prequalification as a supplier; for a tender application or bidding process; to confirm good standing and that your tax matters are in order.

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