Mauritius Tax & Business Guide - Deloitte

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Basic facts
Population 1.3m Inflation 8.9% (2006)
Main languages English, French, Creole GDP per head US$5,182*
Currency Mauritian rupee (MUR) GDP growth 4.9% (2006)
Economic communities WTO
GDP sources 5.2% agriculture, 25.1% industry, 69.7% services
*Economist Intelligence Unit estimate.
Political environment

Mauritius has been independent since 1968 and became a republic in 1992. The president is the head of state and is appointed by the National Assembly (the legislature). He appoints as prime minister the leader of the party that wins a majority in the election to the National Assembly, which is held every five years. The prime minister is currently Dr Navinchandra Ramgoolam, who heads a coalition government comprising the Labour Party, which he leads, and five smaller parties.
Foreign trade and investment
Exports US$2.3bn (2006) Imports US$3.4bn (2006)

Leading export markets: The UK, France and the US.

Major exports: Clothing and textiles, sugar, cut flowers and molasses.

An export-processing zone (EPZ) has been successful, particularly in garment manufacturing. The financial services industry is developing strongly.
Business and financing
Business forms Sole proprietorship, company limited by shares, company limited by guarantee

In addition to the company limited by shares and company limited by guarantee, other forms of business organisation are foreign companies (incorporated outside of Mauritius but conducting business in Mauritius), GBC1 company (offshore company) and GBC2 (international company). The status of sole trader is widely used and governed by the Code de Commerce.
Labour environment
Unemployment rate 9.1% (2006)* Minimum wage Varies by industrial sector
*Economist Intelligence Unit estimate.

The National Remuneration Board sets the minimum wage for non-managerial workers. The minimum wage is MUR 492 per week for an unskilled worker in the EPZ and approximately MUR 644 per week for an unskilled factory worker outside of the EPZ.

Mauritius has a solid record in labour relations. Training and service quality are regarded as important.

Work permits are necessary for the employment of non-Mauritians. There is no maximum stay, but work permits are issued for a minimum period of six months and a maximum of three years.
Taxation
Corporate tax
Flat rate 15%

Resident companies are subject to tax on their worldwide income; non-resident companies are taxed only on income sourced in Mauritius. A company is considered resident if it is incorporated in Mauritius or if its central management and control is exercised in Mauritius. Corporate tax is imposed at a flat rate of 15%, but offshore companies (known as Category 1 global business licence companies, or GBC1) pay tax at an effective rate of 3%. An alternative minimum tax applies where the normal tax payable by a company in any year is less than 5% of its accounting profit. In this case, tax payable is the lower of 7.5% of the accounting profit or 10% of dividends declared for that period.
Individual tax
Flat rate of 15%

Resident individuals are taxed on their worldwide income; non-residents are subject to tax only on income sourced in Mauritius. A resident is a person whose domicile is in Mauritius, not including a person present in Mauritius for a temporary purpose or present for less than 183 days in a tax year or less than 270 days in three tax years. Tax is chargeable at a flat rate of 15%. Domestic dividends received by resident individuals are exempt; foreign dividends received by resident individuals are included in taxable income, with a credit for foreign tax paid.
Capital gains
Chargeable only on some sales of land

Capital gains tax is levied only in the case of the parcelling of land for resale, at rates between 20% and 30%. The tax chargeable will be the higher of the capital gains tax or the land transfer tax. Where the land has been held for more than 15 years, no capital gains tax is chargeable. No capital gains tax is imposed on the sale of other types of assets.
Indirect tax
VAT standard rate 15%

The standard value-added tax (VAT) rate is 15%, with a zero rate applying to exports, books, fertilisers, sugar, and supplies of electricity and water. Exemptions include basic foodstuffs, medical supplies and services, education, rent of accommodation, ships, the sale or transfer of residential property, and certain financial services. A reverse charge applies in respect of services received from abroad.

Registration for VAT purposes is compulsory for businesses with annual taxable turnover above MUR 2m, and voluntary registration is available below this limit. For certain types of business and professions, registration is compulsory irrespective of the value of annual taxable supplies.
Tax administration and compliance
Tax year Corporations: accounting year; Individuals: year to June 30th

Companies must submit a tax return for each tax year by September 30th or by January 31st if they have a June 30th year-end. Tax is payable at the time the return is submitted. Employment income of individuals, bank interest, rent, royalties and payments to contractors and other service providers in the construction industry are subject to deduction of tax at source.

Individuals must submit a tax return by September 30th following the end of the tax year. Under the current payment system, individuals with business, rental, royalty or premium income exceeding certain amounts must submit relevant information and pay tax at quarterly intervals.
Additional tax information
Withholding taxes Dividends 0%; Interest and Royalties paid to non-residents are subject to withholding tax at the normal corporate or individual income tax rates.
Tax treaties Mauritius has concluded more than 30 double tax treaties.
Dividends Domestic dividends are tax-exempt for residents and non-residents; foreign dividends are taxable as income.
Revenue protection There is no transfer-pricing or anti-tax-haven (CFC) legislation.
Groups There is no provision for group taxation.
Incentives Offshore companies; regional headquarters; foreign investment (permanent resident scheme); integrated resort scheme.
Other taxes Betting tax, Business licence fee, Customs duties, Excise duties, Immovable property tax, Land transfer tax, Registration duty, Stamp duty, Work permit fee.