Mauritius tax system in 2023: What you need to know
Mauritius' tax system in 2023 is attractive to investors. It offers a low income tax rate, the opportunity to get a discount on it, other interesting benefits.
Features of business income tax
According to local laws, any company registered in Mauritius, must pay income tax, regardless of the place of receipt, including abroad. It is 15%, with a few exceptions. Companies which export goods, as well as freeport operators pay 3%.
Any company is entitled to an 80% exemption from paying a certain tax that was received abroad. These can be:
- foreign dividends;
- profits from foreign sources that have been received under a collective investment scheme;
- income from closed-end funds;
- profits of an investment adviser or asset manager who has been licensed or approved by the FSC;
- income from aircraft and ship leasing;
- income derived from money lent through a single-race lending platform;
- income from reinsurance or brokerage reinsurance activities;
- profits that were derived from the sale or management of aircraft assets and aircraft parts, including aviation-related consulting services.
Who is exempt from income tax?
Only an organization that conducts business abroad and has its headquarters outside the island is exempt from income tax. In this case, it is considered non-resident, must apply to the FSC as an authorized company registration. Despite the exemption from income tax, the non-resident company must file a return with the IRS.
Corporate Social Responsibility Fund (CSRF)
A company in Mauritius must set up a CSR fund, which is equivalent to 2% of the taxable income for the preceding year. At least 75% of this amount must be remitted to the MRA (Mauritius Revenue Authority). The remaining money must be allocated to the CSR Program in accordance with the company's internal CSR Concept. Its priority areas are:
- education and training;
- family protection, including protection against domestic violence;
- fighting poverty;
- development of social housing;
- support for people with severe disabilities.
This money cannot be used in such cases:
- for activities aimed at supporting shareholders, company management, and their families;
- for actions that violate public safety, harm the national interest, aimed at discrimination;
- political, religious, trade union or other activities carried out for the benefit of shareholders and employees;
- for staff training;
- for promotional activities.
If the money allocated for the development of the CSR Program has not been fully used, its balance is transferred to the MRA together with the annual report. This amount may be reduced after agreement with the National CSR Fund, which must be approved in writing.
- Local administrations in Mauritius do not charge income tax.
- There is no charge on capital gains from the sale of shares in the company.
- Mauritius levies a tax of 5% on the transfer of shares in any company which owns or leases real estate. This amount rises to 20% if among its assets is land.
- Registration fee is 5% when transferring assets to a company which owns or leases real estate. It is exempt from the fee if its securities are listed on the Mauritius Stock Exchange, or has a "global business license".
How to start a business in Mauritius
To learn more about taxation in Mauritius in 2023, contact IT-OFFSHORE experts.