The main income tax legislation in Mauritius is the Income Tax Act 1995 as amended by subsequent Finance Acts. Corporate and Personal Taxes are embodied under one heading of Income Tax and are payable by all resident companies and individuals on non-exempt income derived from Mauritius and from other sources. The profits of all Resident ‘Sociétés’ (Partnerships) are taxable in the hands of the associates in proportion to their profit sharing ratio. A non-resident société is liable to income tax as if the société was a company. ‘Resident’, in relation to an income year, means:
• a company which is incorporated in Mauritius or has its Central Management and control in Mauritius
• an individual who:
a) has his/her domicile in Mauritius unless his/her permanent place of abode is outside Mauritius
b) has been present in Mauritius in that income tax year for a period of, or an aggregate period of, 183 days or more or has been present in Mauritius in that income year and the two preceding income years for an aggregate period of 270 days or more
• a société which has its seat in Mauritius and includes a société which has at least one associate resident in Mauritius
• trust – where the trust is administered in Mauritius and a majority of the trustees are resident of Mauritius or where the settler of the trust was resident in Mauritius at the time the instrument creating the trust was executed
• any other association – an association or body of persons which is managed or administered in Mauritius.
As from 1 January 2010, the fiscal year is on a calendar year basis. Income Tax is payable by residents on non-exempt income derived from Mauritius less allowable deductions including interest on housing loan, subject to conditions. Employers deduct income tax from each salary payments of all individual taxpayers.
The personal tax rates have evolved as follows:
A resident individual is liable for personal income tax on his or her world-wide income; however, earned income arising outside Mauritius is taxed only if it is received in Mauritius. Non-resident individuals pay tax only on their income arising or deemed to arise in Mauritius. There are some income tax privileges for certain employees of offshore entities.
• The expatriate staff of GBC1 and GBC2 (Offshore) Companies (and of other types of offshore entity) pay half the normal rate of personal income tax; two of them per company can import cars and household equipment free of customs duty;
• The crew of ships on the Mauritian Open Registry are exempt from payroll taxes;
• For companies in the Export Processing Zone, two expatriate staff are partly exempted from income tax.
Income is comprehensively defined, including at least the following categories:
• income from employment, including allowances, bonuses, commissions, gratuities (in cash or in kind);
• pensions and annuities resulting from past employment;and compensation for loss of office;