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Mauritius: substantial reform

A significant overhaul of the financial services sector in Mauritius aims to increase transparency and update tax policies.

The Finance (Miscellaneous Provisions) Act 2018 is the blueprint for a major restructure in the jurisdiction covering corporate tax, personal tax, VAT, tax administration and regulatory changes.

The key changes include:

  • The Category 1 Global Business Licence company (GBC1) will become the Global Business Licence company (GBL) from either July 1 2021, if their licence was issued on or before October 16 2017, and January 1 2019, if issued after.
  • Category 2 Global Business Licence companies (GBC2) are being abolished and replaced by a new Authorised Company regime.

These reforms, which have some important dates approaching, are an opportunity for businesses with GBC1 and GBC2 companies within their corporate structures to undertake a review and determine if restructuring action needs to be taken.

Key elements to these changes include:

  • The 80 per cent foreign tax credit the GBC1 received on its foreign income will be abolished on January 2 1019
  • The new GBL will receive an exemption of 80 per cent in respect of its investment income but not its trading income
  • The GBL will have to meet the Mauritian substance requirements (having Mauritian directors, accounts, premises etc) and these are expected to be tightened
  • GBC1s and GBC2s with licences granted on or before October 16 2017 are grandfathered until June 30 2021 and those with licenses after, until December 31 2018
  • An Authorised Company will not be able to access Mauritius' double taxation agreement network as it will be considered non-resident in Mauritius but it will need to make a return of income to the Mauritius Revenue Authority within six months of its year end.

How ILS World can help:

ILS World is very experienced in re-domiciling companies and whether your world is onshore, offshore or both, our company formation and management services can help you achieve your objectives with tax efficiency and cost effectiveness.

For further information contact enquiries@ils.world

Please note: ILS World does not offer tax advice and would therefore recommend you obtain your own tax advice. If you require an introduction to a tax adviser we would be happy to assist.