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Offshore Trusts Report: Mauritius

Tax Treatment

In most respects, the 2001 Act inherited tax privileges granted under previous acts, and Section 46 of the Income Tax Act 1995 was amended accordingly:

(1) Subject to section 7 and subsections (2) and (3) of this section, every trust shall be liable to income tax on its chargeable income at the rate specified in Part III of the First Schedule.
(2) A trust of which
(a) the settlor is a non-resident; and
(b) all the beneficiaries appointed under the terms of the trust are, throughout an income year, non-resident, or hold a Category 1 Global Business Licence or a Category 2 Global Business Licence under the Financial Services Development Act 2001
shall be liable to income tax on its chargeable income at the rate specified in Part II of the First Schedule.
(3) Where a trust which qualifies under subsection (2) deposits a declaration of non-residence for any income year with the Commissioner within 3 months after the expiry of the income year, it shall be exempt from income tax in respect of that income year.
(4) The chargeable income under subsections (1) and (2) shall be the difference between:
(a) the net income derived by the trust; and
(b) the aggregate amount distributed to the beneficiaries under the terms of the trust.
(5) Any amount distributed to the beneficiaries under the terms of the trust shall be deemed to be a charge under section 10(1)(d) and shall be liable to income tax in the hands of the beneficiaries.
(6) Notwithstanding subsection (5), a non-resident beneficiary of a trust shall be exempt from income tax in respect of his income under the terms of the trust.

Offshore Trusts are taxed in the same way as Offshore Companies. These pay corporate income tax at 15% (0% if incorporated before 1st July 1998). In fact until 2003 they could opt to pay tax at any rate they chose between 15% (or zero) and 35%, and normally made this choice according to the rules governing 'controlled foreign corporations' in the country where the major shareholder is based. However, legislation enacted in 2000 removed the facility to choose tax rates from 2003.

Offshore Companies, and therefore Offshore Trusts, are also exempt from stamp duty, land transfer tax, and capital gains (morcellement) tax.

Offshore Trusts are also able to take advantage of Mauritian Double Tax Treaties.

An offshore trust is allowed a credit for foreign tax on its foreign-source income. If no written evidence is presented to the Mauritius Commissioner of Income Tax showing the amount of foreign tax charged, the amount of foreign tax shall nevertheless be conclusively presumed to be equal to 90 per cent of the Mauritius tax chargeable with respect to that income. However, this deemed foreign tax credit of 90% was reduced to 80% as from the year of assessment 2003/2004, which is based upon the year of income ending June 30, 2003.

As noted above, an offshore trust may opt by written notice to the Mauritius Commissioner of Income Tax to be treated as non-resident in Mauritius for tax purposes, in which case it will not be subject to any income tax in Mauritius. However, being non resident, the offshore trust may not benefit from Mauritius' extensive network of double taxation agreements.

   

The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

New Zealand

New Zealand: Legal Framework and Formation Rules and Fees
New Zealand: Review of the Law of Trusts
New Zealand: Taxation of Trusts

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees

 


Mauritius News

Dubai Tax-Free Zone Seeing New Business From India Friday 19/5/2017 The Dubai International Financial Centre, the leading financial hub in the United Arab Emirates, has become an increasingly popular destination for Indian banks, financial institutions, and fund managers, the zone has said.

Mauritius Cuts Company Registration Fee Friday 8/1/2016 Mauritius has slashed the registration fee for a small private company with a turnover not exceeding MUR10m (USD276,700) from MUR2,500 to MUR500.

Nautilus Opens Office In Mauritius Friday 13/12/2013 Nautilus Group, an independent trust company based in Jersey, announced on December 09, 2013 that it has opened an office in Mauritius as part of its strategy for global growth.

Offshore Company Formations Have Slowed Wednesday 7/8/2013 The majority of offshore jurisdictions experienced a decline in company incorporation activity in the second half of 2012 compared with the first half, according to legal services consultancy the Applebly Group.

Offshore Merger And Acquisition Activity Rises Wednesday 9/5/2012 A new report from Appleby shows that transaction values for mergers and acquisitions (M&A) in major offshore financial centers rose by 25% in the first quarter of 2012.

Atlas Targets Asian Trust Services Market Tuesday 18/10/2011 Atlas Corporate Services Group, a leading international corporate and trust service provider, has announced that it has been granted new licences to operate in the Ras-Al-Khaimah Free Trade Zone and in Mauritius, as the firm expands its global reach into Asia.

Mauritius Unveils 2011 Budget Monday 22/11/2010 Mauritian Finance Minister Pravind Jugnauth has unveiled details of the country’s 2011 budget, designed to rebalance growth, to boost productivity, and to consolidate social justice, and providing for a number of key fiscal measures, designed to contain the budget deficit at 4.3% of gross domestic product.

India Presses Mauritius To Renegotiate Treaty Tuesday 25/5/2010 The Indian government would like to see an end to the provision in the India-Mauritius tax treaty which provides that capital gains from sale of securities in India can only be taxed in Mauritius.

India Investment Restrictions Take Effect Tuesday 13/4/2010 Indian government changes to foreign direct investment rules have taken effect from April 1, 2010. The new rules require foreign venture capital funds to obtain prior approval for investment in Indian venture funds, and investment in unregistered trusts is no longer permitted.

European Parliament ACP Report Targets Tax Havens Monday 25/1/2010 The European Parliament has called on the European Commission and the governments of the African, Caribbean and Pacific states to 'include the fight against abuse of tax havens, tax evasion and illicit capital flight as a matter of priority' in the revised Cotonou Agreement, which governs relations between the European Union and the ACP states.