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Mauritius: New tax provisions concerning CFC rules, other items clarified

Mauritius: New tax provisions concerning CFC rules

Clarifications to tax measures included in the Finance Act 2019 (effective 1 July 2019) were released on 20 August 2019.

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The clarifying measures concern the following tax-related provisions:

  • Eligibility for 80% participation exemption. The partial tax exemption of 80% is available to companies that conduct their “core income generating activities” in Mauritius. The clarifications address what constitutes “core income generating activities” and the outsourcing of activities by multinational entities into Mauritius.
  • Controlled foreign company (CFC) rules. The clarifications to the CFC rules reflect that income to be taxed at the Mauritius level will be limited to amounts generated through assets and risks that are linked to “significant people functions” conducted by a Mauritius company; that attribution of CFC income will be in line with the arm’s length principle; and rules on the calculation of income to be included in the chargeable income of a Mauritian-resident entity among other items.
  • Freeport operator or developer. The 3% tax on income of a freeport operator or developer is “grandfathered” until 30 June 2021 for companies issued with a freeport certificate on or before 14 June 2018.
  • Substance requirements. The new requirement that tax returns provide the tax authority with information to allow for a determination of economic substance is clarified with regard to items reported on the return.


Read a September 2019 report [PDF 173 KB] prepared by the KPMG member firm in Mauritius 

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