Mauritius’ resident and non-resident entities are subject to different tax obligations depending on their sources of income and place of management.
Resident companies
Resident companies are taxed on worldwide income, excluding exempt income. A company is considered resident if it is incorporated in Mauritius or if its central management and control are in Mauritius, determined by factors such as where the decisions of the board of directors are taken.
Non-resident companies
Non-resident companies are taxed only on income arising in Mauritius, known as source income. These include receipts from business operations, contracts performed in Mauritius and compensation due to employment principally carried out in Mauritius.
Partnerships and Companies
Mauritius-based partnerships or companies with at least one resident partner or associate are considered resident for tax purposes.
Trusts
Trusts in Mauritius are considered resident unless all the beneficiaries hold a category 1 or 2 global business licence or the establishment is non-resident, which allows the trust to elect non-resident status by declaration.
Sources of Income in Mauritius
Income from business activities, contracts, emoluments from local employment and returns on investments within Mauritius are subject to taxation.
Worldwide Income Distribution
For sources of income which are not exclusively within Mauritius, the Commissioner of Income Tax apportions income between Mauritius and elsewhere on the basis of relevant criteria.
Conclusion
The Mauritius Income Tax Act sets out clear guidelines for the determination of tax residence and source income, ensuring compliance and equitable taxation between resident and non-resident entities.
