Personal Income Taxation in Mauritius
Residency status does not matter when it comes to personal income taxation in Mauritius. This implies that irrespective of the nationality of the individual, personal income tax is charged on income that has been derived or earned within Mauritius.
Resident individuals in Mauritius, however, are subject to their worldwide income for personal income taxation only if the income sourced internationally has been received within the Mauritius.
Income that is earned from employment duties that are executed in Mauritius is considered to be derived from within Mauritius. This is regardless of the remuneration being received outside of Mauritius.
Personal Income Tax Rates in Mauritius
Personal Income is taxed at a rate of 10% for individual income of up to MUR (Mauritian Rupee) 650,000. Net income over and above MUR (Mauritian Rupee) 650,000 is taxed at a rate of 15%.
Other than that, there are income taxes applicable in Mauritius at a local level.
Corporate Income Taxation in Mauritius
A corporation that has a residency status in Malaysia is subject to tax on the worldwide income. On the other hand, as far as non-resident companies are concerned, it is liable to tax on income that has been sourced from or derived from within Mauritius. However, it must be noted that this might also be further subject to tax treaty provisions.
Corporate Income Tax Rate
Corporations are mostly liable to pay income tax on their net income, which is imposed at a rate of 15%. However, in case of companies that export their goods to other different countries, the applicable CIT rate is levied at a rate of 3%. This is charged on income that is attributable to 3%.
Mauritius follows a credit system of taxation. In this case, foreign tax credit is provided on any income that has been sourced outside of Mauritius. This is declared in Mauritius on which foreign tax has already been levied. It must also be noted that all corporate entities in Mauritius are supposed to pay income tax. This includes partnerships, as well as foreign corporations that carry on their businesses within Mauritius.
The following Corporate Income Tax Rates are applicable in Mauritius:
- Global Business Category I companies: CIT is imposed at a rate of 15%.
- For Freeport operators: CIT is imposed at a rate of 15%.
- Export-bearing companies: CIT is imposed at a rate of 3%.
- For all other companies not included above: CIT is imposed at a rate of 15%.
Taxation of Banks (and some other foreign entities)
All banks in Mauritius are subject to a special taxation regime. Under this, the levy is charged on book profit as well as operating income that has been derived during the preceding year. The rates are as follows:
- 7% levy is charged on book profit.
- 5% levy is charged on operating income.
Corporate Social Responsibility Fund
Every subsequent year, companies have to set up a CSR fund that is equivalent to 2% of the chargeable income for the previous year. This is directed towards the social security fund, which mainly includes dealing with health related problems, educational support, health support and training related issues, as well as social housing.
Other Taxation in Mauritius
- Value Added Tax (VAT): VAT is mainly collected by VAT registered corporations at a standardized rate of 15% on all the goods and services that are supplied and consumed within Mauritius. However, basic food items and staples are not charged with VAT. Examples include wheat flours, cereal flours, medical, dental, and hospital related services, and banking services.
- Custom Duties: Custom Duty is levied on all imported foods and services within Mauritius. The rate of duty that is charged is in accordance with the Custom Tariff Act.
- Excise Taxes: Excise duties are imposed on importation of certain selected commodities, mainly including tobacco, and alcohol related goods and services.
- Transfer Tax: Land transfer tax is also levied at a rate of 5%.
- Leasehold Tax: Leasehold tax is imposed on the open market cost at the time of the transfer. It is imposed at a rate of 20%.
- Registration Duty: The effective rate for registration duty is set at 5% of the money that is paid as a contingency of an exchange of movable property.
- Stamp Duty: Stamp Duty is also imposed at varying rates between MUR 25 to MUR 1000.
- Payroll Taxes: Payroll taxes are supposed to be withheld at source from the emolument of the employee at the time when the dues are extended to the employee.