The tax jargon can sometimes feel complicated. Our glossary sets out technical terms that you are bound to encounter frequently in dealing with Mauritian tax.
The partial exemption regime allows tax-resident entities to claim an exemption of 80% on certain sources of foreign income (such as foreign dividends, interest, income from a collective investment scheme) upon meeting conditions linked to having substance in Mauritius. It has replaced the automatic deemed foreign tax credit and allows these sources of income to be taxed at an effective rate of 3%.
An income year runs from 1 July to 30 June.
VAT is levied on the supply of goods or services performed or utilised in Mauritius. VAT registration is either voluntary or compulsory based on the activity or on the registration threshold. Goods and services fall either in the exempt, zero-rated or standard-rated category. The VAT rate on standard-rated supplies is 15%.
A payer has the obligation to withhold taxes on certain specific payments and remit it to the MRA on behalf of the payee. The rates of TDS vary and failure to apply TDS leads to penalties and late payment interest.
Employers are required to withhold tax and pension contributions on the emoluments of its employees under PAYE each month. The employer then remits the sums withheld to the tax authorities on behalf of the employees.