Declaration of non-residence – Here it comes again!

Declaration of non-residence – Here it comes again!

28 March 2019 | Technical

Trusts are set up under the Trusts Act 2001 (TA 2001) in Mauritius and are generally settled for the protection of assets. The purpose of a trust is determined in accordance to its trust deed upon its set up. Based on the terms of the trust deed, the settlor then vests the assets to the trustee who, in turn, legally administers all the assets of the trust for the benefit of the beneficiaries.

Trusts have to submit an annual corporate tax return to the Mauritius Revenue Authority (MRA) each year and are liable to taxation at the rate of 15%.  

However, a special taxation regime applies to a trust where: 

  1. the settlor of the trust is a non-Mauritian resident or holds a Global Business Licence under the Financial Services Act 2007 (FSA 2007); and
  2. (i) all the beneficiaries appointed under the terms of the trust are, throughout an income year, non-residents or hold a Global Business Licence under FSA 2007; or
(ii) which is a purpose trust under the TA 2001 and whose purpose is carried out outside Mauritius.

If a trust falls into that category, the trustees may opt to apply for a declaration of non-residence for the previous income year with the MRA within 3 months after its financial year. It will then be considered as exempt from income tax in respect of that income year. Trustees should bear in mind that even if the declaration of non-residence does not in itself alter the tax residence of the trust, it would be taken into account should an international tax dispute arise.

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