Taxes and Taxation

Table of Contents

• 1. Introduction
• 2. Mauritian Tax Framework for Foreign Residents
• 3. Tax Regime for Holders of a Retirement Permit
• 4. Tax Implications for Other Permit Holders
• 5. Taxation of Real Estate
• 6. Tax Implications in France
• 7. Double Taxation Conventions
• 8. Other Tax Aspects and Obligations
• 9. Synthesis and Conclusion
• Sources of Quotes

1. Introduction

Overview of Mauritius as a destination for European expats

Mauritius has established itself as a destination of choice for European expatriates, attracted not only by its tropical lifestyle and political, social, and economic stability, but also by a development strategy that has propelled it to the ranks of high-income countries. Beyond its tax advantages, the island offers an environment conducive to investment, work, and retirement.

Purpose and scope of the report

The purpose of this report is to provide a detailed analysis of the Mauritian tax framework applicable to foreign nationals, with particular attention paid to European expatriates, in particular retirees from France, Switzerland and Belgium.

It examines the following aspects:

• tax residency criteria
• main taxes and duties
• specific diets linked to the various residence permits
• implications of double taxation conventions

This document is based on information from official sources and other available reference materials.

2. Mauritian Tax Framework for Foreign Residents

Definition of tax residence in Mauritius

Criteria for individuals

The determination of the tax residence of a natural person in Mauritius is based on several criteria defined by the Mauritius Revenue Authority (MRA) and Mauritian tax legislation.

In practice, for non-citizens, the physical presence criteria (183 days or 270 cumulative days) are those most often applied to establish tax residency.

Tax Residence Certificate (TRC)

A person wishing to be certified as a tax resident in Mauritius may apply for a Tax Residence Certificate (TRC) from the Director General of the MRA. This certificate is often required by foreign tax authorities for the application of double taxation agreements.

Tax Account Number (TAN)

Tax residents in Mauritius must obtain a Tax Identification Number (TAN) to be able to fulfill their reporting obligations.

Tax base

Tax residents

Individuals who are tax residents in Mauritius are taxable on their worldwide income. However, a crucial distinction is made for foreign source income:

Tax residents are entitled to various reliefs, deductions, and allowances. Case law, notably the "Dilloo" case, has confirmed that this principle applies to residents and that repatriated foreign-source income retains its nature as "income" and is not considered capital.

Non-tax residents

Individuals who are not tax residents in Mauritius are only taxable on their income from Mauritian sourcesNon-residents do not benefit from the tax reliefs, deductions and personal allowances granted to residents.

Overview of the main taxes and duties in Mauritius

Personal Income Tax (PIT)

Progressive system: Since July 1, 2023, Mauritius has applied a progressive tax system with rates ranging from 0% to 20%.

• Taxable income: Calculated by deducting from gross income the deductible expenses, exemptions and authorized reductions
• PAYE system: Applicable to employment income (wages, salaries, pensions)
• CPS System: For self-employed workers and business or rental income
• Exempt income: In particular dividends paid by companies resident in Mauritius

Corporate Income Tax (CIT)

• Standard rate: 15% on profits
• Reduced rate: 3% for exports, Freeport operators, medical/biotech/pharmaceutical sectors
• Global Business License (GBL): 15% with partial exemption of 80% possible (effective rate of 3%) subject to economic substance conditions

Value Added Tax (VAT)

• Standard rate: 15% on taxable supplies
• Registration threshold: Mandatory if turnover > 6 million MUR
• Exempt supplies: Education, healthcare, exports (0%)

Property taxes

• Registration fees: 5% of the value (paid by the purchaser)
• Land transfer tax: 5% of the value (paid by the seller)
• Annual property tax: None as a rule

3. Tax Regime for Holders of a Retirement Permit in Mauritius

Licensing requirements and financial requirements

The non-citizen retiree permit in Mauritius is available to people who meet certain conditions:

Progression to permanent residence

After five consecutive years of residence under the retirement permit and subject to meeting the financial conditions (having transferred a total of at least USD 200,000), the holder can request a 20-year permanent residence permit.

Investment rights

The holder of a retirement permit is entitled to invest in a business in Mauritius, provided that he or she is not employed there and does not receive a salary or employment-related benefits.

Taxation of retirement pensions and other income from foreign sources

As Mauritian tax residents, holders of a retirement permit are subject to tax on their worldwide income, but the principle of remittance basis taxation applies.

Important clarification on “transferred funds”

Impact of Double Taxation Agreements (DTAA)

The actual taxation of pensions and other repatriated foreign income depends heavily on the provisions of the tax treaty between Mauritius and the retiree's home country (France, Belgium). These treaties determine which state has the right to tax this income.

Specific tax benefits, exemptions or deductions

Retirees residing in Mauritius benefit from the general Mauritian tax framework:

Absence of certain taxes

Personal deductions and allowances

As tax residents, retirees are entitled to the deductions and allowances provided for by Mauritian law:

• Deductions for dependents
• Deductions for medical insurance premiums
• Deductions for contributions to approved personal pension plans
• Deductions for donations to charitable institutions

Distinction with the Premium Visa

Tax planning strategy

Careful planning of foreign income repatriations is recommended:

• Retirees can choose to repatriate to Mauritius only the funds necessary for their current expenses
• The excess can be kept on offshore accounts to manage Mauritian tax exposure
• This strategy must comply with the terms of applicable double taxation agreements.

4. Tax Implications for Other Permit Holders in Mauritius

Holders of a self-employed permit

Permit conditions

The Self-Employed Permit or Occupation Permit Self-Employed is intended for foreigners wishing to exercise a professional activity as a freelancer, consultant or independent professional in Mauritius.

Taxation of personal and business income

The income generated is subject to thepersonal income tax (PIT) according to the progressive rates in force (0% to 20%) on net operating profits.

Deductible expenses

Expenses incurred entirely, exclusively and necessarily for the purpose of producing gross income from the activity are deductible.

Current Payment System (CPS)

Corporate tax (if legal structure created)

If the self-employed person chooses to set up a local company (“one-person company”):

• The company will be subject to thecorporate income tax (CIT) at 15%
• dividends paid by this Mauritian company to the independent tax resident would be tax exempt on personal income

VAT obligations

VAT registration and invoicing required if the annual turnover of taxable supplies exceeds 6 million MUR. Standard rate: 15%.

Holders of an Investor Permit

Permit conditions

The Occupation Permit Investor is granted to foreigners who make an investment in Mauritius.

Taxation of the investor's personal income

If the holder becomes a Mauritian tax resident, his worldwide investment income is taxable on the basis of repatriation to Mauritius:

• Mauritian dividends: Exempt from income tax
• Repatriated foreign dividends: Subject to progressive rates
• Interest income: Taxable (specific rate of 15% or integration into global income)

Corporate tax for local business

The Mauritian company in which the investment is made:

• Standard rate: 15% on profits
• Reduced rate: 3% for specific activities (export, Freeport)
• Global Business License (GBL): Partial exemption of 80% possible (effective rate of 3%) if substance conditions are met

VAT obligations for the company

Registration required if annual turnover of taxable supplies > 6 million MUR.

Summary tables

5. Taxation of Real Estate Property and Transactions in Mauritius for Foreigners

Obtaining a residence permit through the acquisition of real estate

The acquisition of real estate in Mauritius may entitle you to a residence permit for the foreign buyer and his family (spouse and dependent children), subject to a minimum investment of 375,000 USD in approved real estate programs.

Main real estate programs

Taxes and fees on real estate acquisition

The acquisition of real estate by a foreigner entails various rights and fees:

Annual property taxes

Taxation of rental income from Mauritian real estate

For Mauritian tax residents

Rental income from real estate located in Mauritius is considered as income from Mauritian sources and are therefore taxable:

• Aggregated with the taxpayer's other income
• Subject to progressive rates income tax (0% to 20%)
• Deductible expenses directly linked to the rental activity can be claimed
• If the thresholds are reached, this income may fall under the CPS system (quarterly declarations)

For non-tax residents of Mauritius

Rental income from Mauritian properties by non-residents:

• Are income from Mauritian sources and therefore taxable in Mauritius
• Subject to a 15% rate (according to several sources)
• No personal deductions (reserved for residents)
• Double taxation treaties determine how to avoid double taxation in the country of residence

Taxation of capital gains on the resale of real estate

Summary of real estate advantages

Acquiring real estate in Mauritius combines several advantages:

• Obtaining a residence permit (threshold 375,000 USD)
• No annual property tax widespread
• No capital gains tax (except commercial activity)
• Rental income taxable according to tax status (progressive for residents, 15% for non-residents)
• New payment rule : 85% in Mauritian rupees since December 2024

6. Tax Implications in France for Expatriation to Mauritius

Mainly for French citizens

The expatriation of a French citizen to Mauritius entails significant tax consequences in France, particularly with regard to the sale of real estate located in France and the possible application of the "exit tax" on unrealized capital gains on securities.

Taxation of capital gains on the sale of French real estate

General principle

Exemption from former main residence

There’s nothing quite like a total exemption capital gains tax may apply to the sale of the former main residence in France, under strict conditions:

Specific exemption for non-residents

Non-residents can benefit from a specific exemption on capital gains, up to a limit of €150,000 net taxable capital gain.

Calculation methodology and applicable rates

If no total exemption applies, the real estate capital gain is calculated and taxed as follows:

1. Calculation of gross capital gain

Sale price (less transfer costs) less expensive le purchase price (increased by acquisition costs – actual or fixed at 7.5% – and certain work expenses – actual or fixed at 15% if the property has been held for more than 5 years).

2. Reductions for duration of detention

3. Tax rate on taxable net capital gains

4. Tax representative

The designation of a accredited tax representative in France may be mandatory if:

• The transferor is resident outside the EEA (case of Mauritius)
• The sale price > €150,000
• The property has been owned for less than 30 years

French Exit Tax

The "exit tax" is a French tax system which aims to impose taxes on unrealized capital gains on certain financial assets when transferring tax domicile outside France.

Conditions of applicability

Assets concerned

This concerns latent capital gains (not yet realized) on:

• Securities and social rights (stocks, bonds, company shares)
• Receivables originating from an earn-out clause
• Capital gains tax deferral
• Cryptomonnaies
• PEA may be exempt under certain conservation conditions

Calculation and rates

The exit tax is calculated on the latent added value (difference between the value of the securities on the day of transfer of domicile and their acquisition price).

Payment or suspension of payment

At the time of departure, the taxpayer has the choice between:

• Immediate payment tax
• Suspension of payment (automatic or on demand with guarantees)

The suspension of payment ends in particular in the event of transfer, repurchase, reimbursement or cancellation of the securities concerned.

Exit tax relief or refund

A reduction (cancellation) or refund of the exit tax is possible in several situations:

Other cases of tax relief:

• Return to France before the expiry of the 2 or 5 year periods (if securities not transferred)
• Death of the taxpayer
• Donation of securities (under conditions)

Reporting procedure

Summary and recommendations

7. Double Taxation Agreements (DTAA): Mauritius with France, Switzerland and Belgium

Double Taxation Avoidance Agreements (DTAAs) are essential bilateral agreements for expatriates, as they aim to prevent the same income from being taxed twice by two different states. They allocate taxing rights and provide mechanisms to eliminate double taxation, while combating tax evasion.

Tax treaty between Mauritius and France

The tax treaty between Mauritius and France has been signed on December 11, 1980 et amended by an amendment of June 23, 2011The MRA and the French authorities publish summary texts integrating the impact of the MLI.

Pensions (Art. 18 of the original agreement)

Dividends (Art. 10)

Dividends may be taxed in the two states, but with limitations:

Interest (Art. 11)

• Can be imposed in the beneficiary's state of residence (Mauritius)
• Also taxable in the source state (France) according to French legislation
• No conventional ceiling for French withholding tax
• Current French legislation often exempts interest paid to non-residents

Royalties (Art. 12)

Capital Gains (Art. 13)

Tax treaty between Mauritius and Belgium

The tax treaty between Mauritius and Belgium has been signed on July 4, 1995A synthesized text integrating the impact of MLI is available.

Pensions (Art. 18)

Dividends (Art. 10)

Interest (Art. 11)

• Maximum Belgian withholding rate: 10%
• Exemptions at source for certain types of interests:
  • Trade receivables
  • Export-related loans guaranteed by public entities
  • Bank loans and deposits
  • Interest paid to the other State

Royalties (Art. 12)

Tax relations between Mauritius and Switzerland

Implications for Swiss expatriates in Mauritius

In the absence of a DTAA, Swiss expatriates becoming tax residents in Mauritius will be subject to the following regime:

In Mauritius

• Imposed on their global income
• Foreign (Swiss) source income taxed only if they are repatriated
• Tax calculated according to the Mauritian progressive rates
• Mauritius could grant a unilateral tax credit for Swiss taxes paid

In Swiss

Switzerland will tax income from Swiss sources according to its domestic legislation applicable to non-residents:

Summary tables of agreements

8. Other Relevant Tax Aspects and Reporting Obligations

Wealth tax in Mauritius

Inheritance and gift tax regime in Mauritius

Inheritance rights

Donation rights

The vast majority of sources consulted indicate that it there is no gift tax in MauritiusSome unofficial sources mention the existence of gift taxes with variable rates, but this information contradicts more specialized sources.

Tax reporting obligations in Mauritius for expatriates

Expatriates who become tax residents in Mauritius are subject to reporting obligations towards the Mauritius Revenue Authority (MRA).

Annual Income Tax Return

Tax residents must file an annual income tax return in the following cases:

The declaration must include:

• All income from Mauritian sources
• Foreign source income repatriated to Mauritius
• The details of the deductions, allowances and tax credits claimed

Deadlines and payment

Payment terms

• Employees PAYE: Tax withheld at source, possible balance payable on September 30
• CPS self-employed workers: Quarterly payments + annual adjustment

Non-residents

Non-residents receiving income from Mauritian sources (e.g., rental income) are also required to file a tax return for this specific income. They do not benefit from personal allowances and deductions.

Tax reporting obligations in the country of origin

Even after moving to Mauritius, a European national may retain reporting obligations in his or her country of origin, particularly if he or she retains assets there or receives income from local sources.

France

Other obligations:

• Bank accounts abroad: Mandatory declaration for French tax residents (not for non-residents except in exceptional circumstances)
• Change of address: Inform the tax authorities of your departure abroad

Switzerland

Recommendations:

• Inform the cantonal tax authorities of the departure
• Appoint a representative in Switzerland for tax correspondence

Belgium

Advantage: Belgian expatriates in Mauritius can benefit from the more advantageous Mauritian tax regime, notably the absence of taxation on non-repatriated foreign-source income.

Summary table of obligations

Summary of Mauritian tax advantages

9. Synthesis and Conclusion

Mauritius presents a attractive tax framework for European expatriates, particularly retirees, thanks to a combination of moderate tax rates, the absence of certain current taxes and a remittance basis regime for foreign-source income of tax residents.

Key Points for European Expats

Mauritian Tax Residence

Income Taxation

Residence Permit and Associated Taxation

Real Estate Acquisition

The acquisition of real estate in Mauritius (≥ 375,000 USD) allows you to obtain a residence permit and transforms the investment into a life project:

• Initial costs: Registration fees (5%), EDB fees, notary fees
• New rule: 85% of the price in Mauritian rupees (since December 2024)
• Rental income: Taxable (progressive for residents, 15% for non-residents)
• Capital gains: Not taxed except for commercial activity

Tax Implications in the Country of Origin

Example of France

Double Taxation Avoidance Agreements (DTAA)

Country	DTA	Key points
France	YES	Private pensions: residence. Dividends: 5%/15%. Facilitates exit tax deferral.
Belgium	YES	Private pensions: residence. Dividends: 5%/10%. Royalties: 0%
Switzerland	NOT	High risk of double taxation. 35% non-recoverable withholding tax

Other Taxes and Obligations

• VAT : 15% standard, registration required if turnover > 6 million MUR
• Reporting obligations: Mauritian residents + country of origin bonds

General Conclusion

Crucial elements to master

• Tax residency criteria and their impact
• How base taxation works ("remittance basis")
• Implications of DTAA (or their absence with Switzerland)
• Tax consequences in the country of origin (real estate sale, exit tax)

Special benefits for retirees

Retirees can particularly benefit from:

• Non-taxation of non-repatriated foreign income
• No wealth or inheritance tax
• Taxation of repatriated foreign pensions subject to DTAA

Points requiring special attention

Tax Analysis for European Expatriates Moving to Mauritius
Information document – ​​Expert consultation recommended for any personal decision

Sources of Quotes

1. Overview of Taxes –Mauritius Revenue Authority
   https://www.mra.mu/taxes-duties/overview-of-taxes
2. VAT –Mauritius Revenue Authority
   https://www.mra.mu/26-vat
3. VAT FAQs –Mauritius Revenue Authority
   https://www.mra.mu/download/VATFAQs.pdf
4. Exempt Income –Mauritius Revenue Authority
   https://www.mra.mu/individuals/exempt-income
5. Guidelines for IRS-RES-PDS – EDB Mauritius
   https://edbmauritius.org/wp-content/uploads/2022/10/Guidelines-for-IRS-RES-PDS-1.pdf
6. Info Center – EDB Mauritius
   https://edbmauritius.org/info-centre
7. Smart City Scheme – EDB Mauritius
   https://www.edbmauritius.org/schemes/smart-city-scheme
8. Smart City Scheme Guidelines – EDB Mauritius
   https://www.edbmauritius.org/sites/default/files/media_library/docs/smart_city_scheme_guidelines.pdf
9. Smart City – EDB Mauritius
   https://www.edbmauritius.org/schemes/smart-city
10. Property Development Scheme PDS Smart City Scheme SCS – EDB Mauritius
    https://www.edbmauritius.org/investment-opportunities/property-development-scheme-pds-smart-city-scheme-scs
11. G+2 Apartment Scheme – EDB Mauritius
    https://www.edbmauritius.org/schemes/gplus2-apartment-scheme
12. G+2 Scheme – EDB Mauritius
    https://www.edbmauritius.org/investment-opportunities/gplus2-scheme
13. G+2 Scheme Guidelines – EDB Mauritius
    https://www.edbmauritius.org/sites/default/files/media_library/docs/g_2_scheme_guidelines.pdf
14. G-2 Scheme – EDB Mauritius
    https://www.edbmauritius.org/schemes/g-2-scheme
15. Acquire Property Residential Apartments G2 – EDB Mauritius
    https://www.edbmauritius.org/work-live/acquire-property/residential-apartments-g2
16. Property Taxes and Fees in Mauritius: Essential Guide – PropertyMap.mu
    https://www.propertymap.mu/news/details/46/property-taxes-and-fees-in-mauritius
17. France-Mauritius tax treaty – Impots.gouv.fr
    https://www.impots.gouv.fr/sites/default/files/media/10_conventions/ile_maurice/ile-maurice_convention-avec-l-ile-maurice_fd_1920.pdf
18. Belgium Synthesised Convention –Mauritius Revenue Authority
    https://www.mra.mu/download/BelgiumSynthesised.pdf
19. Double Taxation Agreements –Mauritius Revenue Authority
    https://www.mra.mu/taxes-duties/international-taxation/double-taxation-agreements
20. Switzerland DTA Treaties –Mauritius Revenue Authority
    https://www.mra.mu/media/wysiwyg/DTA%20Treaties/Switzerland.pdf
21. Swiss Tax Convention (French version) – Fedlex.admin.ch
    https://www.fedlex.admin.ch/eli/cc/1995/4278_4278_4278/fr
22. Swiss Tax Convention (German version) – Fedlex.admin.ch
    https://www.fedlex.admin.ch/eli/cc/1995/4278_4278_4278/de