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
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.