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Mauritius: Proposed partial exemption regime, replacing deemed foreign tax credit

Mauritius: Proposed partial exemption regime

The budget delivered by the Mauritian government for 2018/19 includes proposed amendments to revise the tax treatment of global business companies. In general, the changes would aim to align the taxation of global business companies with that of Mauritius domestic companies.


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As proposed, the partial exemption regime would replace the deemed foreign tax credit system (effective 1 January 2019). This partial exemption regime would be implemented so that all “Category 1” global business companies (GBL1) would be granted an income tax exemption at the rate of 80% on specific forms of income. Forms of income covered under the partial exemption would include:

  • Foreign-source dividends and profits attributable to a foreign permanent establishment
  • Interest and royalties
  • Income derived from the provision of specified financial services

In order to qualify for this partial exemption, the GBL1 would have to satisfy certain pre-defined substantial activity requirements as imposed by the Financial Services Commission. If the partial exemption is not available, careful consideration would be required as to whether the GBL1 would remain entitled to benefit from the existing foreign tax credit system in respect of foreign-sourced income.

The Category 2 global business regime would be repealed effective 1 January 2019. The current regime would continue to apply until 30 June 2021 for companies that were issued a licence prior to 16 October 2017. This would require existing companies that hold a Category 2 global business licence to review their current structures because they would not be able to operate under this licence after 30 June 2021.


Read a July 2018 report [PDF 96 KB] prepared by the KPMG member firm in South Africa

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