Key Takeaways
- Mauritius levies corporate income tax on company profits, with a standard rate and reduced rates that may apply to certain activities.
- Whether profits are taxed on a worldwide or Mauritius-source basis depends on a company's residence, a key point for foreign-owned structures.
- Partial exemption, Freeport and intellectual property reliefs can reduce the effective burden for qualifying foreign-owned and Global Business Licence companies.
- Companies face filing, advance payment and penalty obligations alongside additional charges and the domestic minimum top-up tax under the global minimum tax framework.
Understanding Corporate Tax in Mauritius (Income Tax on Companies)
Corporate tax in Mauritius is a real charge, not a nominal one. Companies pay income tax at a flat rate of 15% on net income under the Income Tax Act 1995, administered by the Mauritius Revenue Authority.
For a foreign owner, the most important point is that this is not a zero-tax or purely territorial system. A company resident here is taxed on worldwide income, while a non-resident company is taxed only on income sourced in the country, subject to treaty relief.
The charge reaches more than ordinary companies. Trusts, trustees of unit trust schemes, collective investment schemes, foundations, and non-resident partnerships all fall within the income tax net, with trusts and foundations (other than charitable ones) treated as companies for tax purposes.
This article explains how the rate is applied, how the tax base is computed, the exemptions and incentives available, the additional levies layered on top, and the filing obligations a foreign-owned entity must meet. It will be most useful to investors and advisers weighing a Global Business Licence structure or any locally registered subsidiary or branch.
Legal Basis: The Income Tax Act 1995 and the Charge on Company Profits
The governing statute is the Income Tax Act 1995, enacted by Parliament and maintained by the revenue authority in a consolidated version updated to May 2026. Corporate tax is levied on chargeable income, defined as net income: the aggregate that remains after allowable deductions are taken from gross income.
Gross income means the total income a company derives, excluding income that the Act treats as exempt. Chargeable income generally starts from accounting profit, then adjusts for disallowed items, exemptions, and specific fiscal rules.
The Act also contains a general anti-avoidance rule. It allows the authority to disregard transactions entered into with the sole or dominant purpose of obtaining a tax benefit, weighing factors such as the manner in which a transaction was structured and carried out.
Capital allowances are set out in the same legislation. A company may deduct qualifying capital expenditure on assets such as offices, showrooms, industrial premises, and machinery at prescribed rates, regardless of how those assets are treated for accounting depreciation.
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Corporate Tax Rate(s): The 15% Standard Rate and Reduced 3% Rates
The headline rate is 15% on net income, applied as a flat charge with no separate state or federal layer. Several activities qualify for a reduced 3% rate where the legislation provides for it.
| Category | Rate |
|---|---|
| Standard corporate income tax | 15% |
| Export of goods (on export-attributable income, prescribed formula) | 3% |
| Freeport operators/manufacturers meeting local-market conditions | 3% |
| Qualifying higher education institutions | 3% |
| Specified medical, biotech, and pharmaceutical manufacturing | 3% |
| Banks | 5% on the first tranche of chargeable income, 15% thereafter |
The 3% export rate applies to the chargeable income attributable to exports, calculated under a prescribed formula. From the 2026-27 Budget, the reduced rate stops applying to the export of live animals.
A separate route to an effective 3% rate runs through the partial exemption regime. Subject to substance requirements, a company can exempt 80% (or 95% in defined cases) of certain income, which brings the effective rate on that income down to 3%.
Two relief features matter for inbound structures. Dividends received from companies resident in the country are exempt from tax, whether the recipient is resident or not, and a credit system grants foreign tax credit on foreign-source income that has borne foreign tax of a similar character.
Residence-Based Liability: Worldwide vs. Mauritius-Source Profits
A resident company is taxed on its worldwide income. A non-resident company is taxed only on income arising in the jurisdiction, with treaty provisions and foreign tax credits generally available to relieve double taxation.
The distinction shapes how a branch is treated. A registered branch pays 15% only on income derived locally, and there is no separate branch profits tax; a tax-resident subsidiary pays 15% on all of its income.
An Authorised Company, the successor to the former GBC2, is treated as non-resident and taxed on locally sourced income only. This sits alongside a treaty network spanning more than 40 countries across Africa, Asia, and Europe, which is a principal reason foreign groups route investment through the jurisdiction.
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Computing the Tax Base: Gross Income, Allowable Deductions and Capital Allowances
Gross income covers all income a company derives other than exempt income. From that figure, the company deducts expenditure, losses, and allowances that the Act permits, then arrives at net income on which tax is charged.
Several rules govern what may be deducted:
- Interest is deductible where it relates to capital employed exclusively in producing income.
- Inventory must be valued at the lower of historical cost or net realisable value; the LIFO method is not accepted for tax.
- Income taxes and foreign taxes are generally not deductible, although municipal taxes on buildings and irrecoverable input VAT are.
- Employer pension contributions made on behalf of employees may be deducted.
- Goodwill amortised under accounting principles is disallowed, but the cost may be capitalised and written off at an annual allowance of 5%.
Capital allowances replace accounting depreciation for tax purposes, applied to qualifying assets at prescribed rates. Research and development carried out within the jurisdiction attracts accelerated depreciation of 50% on qualifying capital expenditure, plus a double deduction for certain qualifying R&D spending tied directly to the business.
A small enterprise with annual turnover not exceeding MUR 10 million, GBCs excluded, may apply to the Director-General to compute net income on a cash basis.
Loss Relief and Carry-Forward Rules
Trading losses can be set against net income of the same year. An unrelieved balance carries forward against net income of the following five income years, but only if there is no change of more than 50% in shareholding at the end of each of those years.
Two refinements widen the relief. Losses attributable to capital allowances carry forward indefinitely, and the five-year limit does not apply to losses from annual allowances on capital expenditure incurred on or after 1 July 2006, nor to losses tied to deep ocean water air conditioning, water desalination plant, or R&D.
Loss carrybacks are not allowed. There is also no general group relief or tax consolidation, so losses cannot be surrendered between group members, and losses of overseas subsidiaries bring no domestic relief.
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Exemptions and Incentives: The Partial Exemption Regime, Freeport and IP Holidays
The partial exemption regime is the central incentive for foreign-owned holding and financing structures. Introduced by the Finance Act 2018, it exempts 80% of specified categories of income, which lowers the effective rate on that income to 3%.
Qualifying income includes foreign dividends not deducted in the source country, interest income, income from ship and aircraft leasing, income from leasing international fibre capacity, peer-to-peer lending interest, and reinsurance and reinsurance brokering income. For interest earned by collective investment schemes and closed-end funds, the exemption is raised from 80% to 95%.
The regime carries conditions a foreign owner must plan for:
- The exemption is not automatic. A company must elect to apply it.
- Income covered by the partial exemption cannot also claim a foreign tax credit.
- To claim the 80% exemption on interest income, the company must conduct its core income generating activities locally, employ an adequate number of suitably qualified people, and incur a minimum level of expenditure proportionate to its activities.
This regime replaced the old deemed foreign tax credit. Before 1 January 2019, GBC1s enjoyed an automatic 80% deemed credit producing an effective 3% rate while GBC2s were fully exempt; both were abolished under OECD BEPS pressure and replaced by substance-tested partial exemption.
Freeport manufacturing offers a separate path. Income of a freeport operator or private freeport developer engaged in manufacturing is taxed at 3%, provided minimum employment and expenditure conditions are met; the earlier blanket freeport exemption ran only until 30 June 2021 for certificates issued on or before 14 June 2018.
Targeted holidays round out the picture. Companies set up on or after 1 July 2017 in innovation-driven activities can claim an eight-year exemption for IP assets developed locally, holders of a global treasury or global legal advisory licence issued on or after 1 September 2016 enjoy a five-year exemption subject to substance, and manufacturers can use a 15% Investment Tax Credit over three years (extended to 30 June 2029, with unrelieved credit carried forward for ten years). Further details are set out by PwC.
Corporate Tax Treatment of Foreign-Owned and Global Business Licence Companies
Most inbound investors use a Global Business Licence company. Since 1 January 2019, the former GBC1 has been renamed the GBL and is taxed at 15%, with access to the partial exemption where conditions are met.
A GBL must be genuinely run from the jurisdiction. Its core income generating activities must be conducted in or from the country, it must be managed and controlled locally and administered by a management company, and it must have at least two resident directors of sufficient calibre to exercise independent judgment.
Residence status determines treaty access. A GBL is tax resident and may apply to the Director General for a Tax Residence Certificate, which is needed to claim double tax treaty benefits.
The GBC2 was abolished from January 2019. Former GBC2 holders must seek authorisation from the Financial Services Commission as an Authorised Company, which is treated as non-resident and must file a return of income within six months of its year-end.
Two practical points help foreign owners. GBCs and other registrar-approved companies may keep accounts, file the advance payment statement and return, and pay tax in an approved foreign currency; and GBL companies fall outside the Fair Share Contribution.
A GBL that claims the 80% partial exemption on foreign-source income receives no actual foreign tax credit on that same income. The two reliefs cannot be combined.
Additional Corporate Charges: CSR Fund, CCR Levy, Fair Share Contribution and Alternative Minimum Tax
The 15% rate is not the whole cost. Several additional charges sit on top of the standard corporate tax, and the mix that applies depends on a company's sector, turnover, and licence type.
CSR Fund
Each year a company must set up a CSR Fund equal to 2% of the previous year's chargeable income. Of a fund set up on or after 1 January 2019, at least 75% must be remitted to the revenue authority; for funds set up on or after 1 January 2026, that share drops to at least 50%. GBCs are excluded from the obligation.
CCR Levy
The CCR Levy applies from the year of assessment commencing 1 July 2024. It is charged at 2% on chargeable income, including exempt income, of companies and resident partnerships with turnover above MUR 50 million. From the 2026-27 Budget it moves to quarterly APS statements on a phased basis and ceases to be eligible for tax credit offsets.
Fair Share Contribution
A temporary contribution runs from 1 July 2025 to 30 June 2028. Corporates other than banks with annual chargeable income and supplies above MUR 24 million pay 5% of chargeable income at the standard rate, or 2% where taxed at 3%.
Banks face a 5% contribution on total chargeable income, including income from non-residents and GBCs, plus an extra 2.5% on chargeable income from domestic operations. The charge does not apply to GBL holders, exempt companies, or those benefiting from tax holidays, and the 2026-27 Budget proposes replacing it with a 35% top tax band.
Alternative Minimum Tax
An AMT takes effect from the year of assessment commencing 1 July 2026. It applies to the hotel, insurance, financial intermediation, real estate, and telecommunications sectors: where normal tax payable is less than 10% of adjusted book profit, tax is deemed to be 10% of that profit. Global business entities, exempt bodies, and companies on specific holidays are outside its scope.
The OECD Global Minimum Tax (Pillar Two): Mauritius's Qualified Domestic Minimum Top-Up Tax
Large multinational groups face a 15% minimum effective rate through a Qualified Domestic Minimum Top-up Tax aligned with the OECD's Pillar Two GloBE Rules. The mechanism was first referenced in the Finance Act 2022, with detailed QDMTT provisions introduced by the Finance Act 2025 and effective for the year of assessment commencing 1 July 2025.
Only the QDMTT has been adopted. The jurisdiction has not enacted the Income Inclusion Rule or the Undertaxed Profits Rule, so any top-up on low-taxed local profit is collected domestically rather than by a foreign parent. The OECD maintains a central record of qualified legislation.
The regime catches resident entities within an MNE group whose consolidated revenue reaches EUR 750 million or more in at least two of the last four fiscal years. Where the combined effective rate of the group's local members falls below 15%, each member pays QDMTT to bring it to that floor, with GloBE income based on financial accounting net income before consolidation adjustments.
Investment funds, pension funds, and real estate investment vehicles are among those excluded. In-scope companies must notify the authority of the designated resident person responsible for the return within six months of the group's fiscal year-end.
The designated person files the QDMTT return and pays within 15 months of the fiscal year-end. The rules do not provide the 18-month first-year extension found in the OECD model and many other jurisdictions, and late payment carries a 5% penalty plus 0.25% monthly interest.
A Communiqué issued on 26 April 2026 grants relief where a deadline would otherwise fall between 1 April 2026 and 29 June 2026, allowing submission and settlement by 30 June 2026. Several parameters remain to be prescribed by regulation, including substance-based income exclusion percentages, the treatment of safe harbours, and how the QDMTT interacts with the partial exemption regime.
Filing, Payment, APS and Penalties for Companies
Every company files an annual return and pays the tax due at the same time, declaring all income of the preceding year. The deadline is six months from the end of the month in which the accounting year ends; for a 30 June or 31 December year-end, the return is due two days (excluding Saturdays and public holidays) before the end of December and June respectively.
Quarterly instalments apply through the Advance Payment System. APS statements are filed, and any tax paid, within three months from the end of each quarter, though a company with turnover below MUR 10 million per annum is exempt. The mechanics are set out by PwC.
Filing and payment must be done electronically by all companies deriving gross and exempt income. An amended return cannot be filed beyond three years from the end of the relevant year of assessment, except for undeclared or underdeclared income.
| Default | Penalty |
|---|---|
| Failure to file electronically | 20% of tax payable, capped at MUR 100,000 (or MUR 5,000 where no tax declared) |
| Late payment | 5% of tax due, plus 0.5% interest per month or part month until paid |
| Failure to file a return | MUR 2,000 per month or part month, capped at MUR 20,000 |
| Late payment, turnover not above MUR 10 million | 2% rather than 5% |
The authority is barred from raising an assessment for any period beyond three years preceding, although there is no statutory time limit for recovering tax that has already been assessed.
Conclusion
The real decision driver for a foreign owner is not the headline rate but residence classification, because that single determination sets whether the company answers to Mauritius tax on global profits or only on what it earns locally. Everything else, the partial exemption, the Freeport concessions, the intellectual property holiday, the additional charges, and the domestic minimum top-up tax, layers on top of that foundational question.
Before any structure is finalised, confirming how residence will be established and maintained under Mauritius rules is the one concrete step that prevents every other compliance obligation from being calculated on the wrong profit base from the outset.
How Expanship Can Help Your Business in Mauritius
Expanship supports foreign-owned companies with corporate tax registration, return preparation, APS instalments, and the substance and election decisions that drive the partial exemption regime, alongside the wider set of services a non-resident entity needs to operate locally.
- Company incorporation and Global Business Licence applications
- Registered agent and registered office services
- Corporate tax registration and annual and quarterly filing
- Ongoing compliance management, including CSR, CCR Levy, and QDMTT obligations
- Accounting and bookkeeping, including foreign-currency reporting for GBCs
- Banking introductions
To discuss your structure and obligations, contact Expanship Mauritius.
Frequently Asked Questions
Companies pay income tax at a flat 15% on net income. A reduced 3% rate applies to defined activities such as the export of goods and qualifying freeport manufacturing, and the partial exemption regime can bring the effective rate on certain income down to 3%.
A foreign-owned company that is tax resident pays the same 15% on worldwide income as any resident company. A Global Business Licence company is fully taxable at 15% but may claim the 80% partial exemption on qualifying foreign income if it meets substance requirements, while an Authorised Company is treated as non-resident and taxed only on locally sourced income.
No general capital gains tax is levied. The revenue authority can, however, treat a transaction as ordinary trading and assess the gain as income, in which case it is taxed as business profit at the normal rate.
Companies may face a CSR Fund contribution of 2% of the prior year's chargeable income, a CCR Levy of 2% where turnover exceeds MUR 50 million, and a temporary Fair Share Contribution running from 1 July 2025 to 30 June 2028 for entities above MUR 24 million in chargeable income and supplies. An Alternative Minimum Tax also begins from the year of assessment commencing 1 July 2026 for specified sectors.
Yes, for large groups. A Qualified Domestic Minimum Top-up Tax ensures a 15% minimum effective rate for resident members of multinational groups with consolidated revenue of EUR 750 million or more in at least two of the last four fiscal years, effective for the year of assessment commencing 1 July 2025.
The annual return and payment are due six months after the end of the month in which the accounting year closes, with a specific cut-off for 30 June and 31 December year-ends. Companies with turnover of MUR 10 million or more also file quarterly APS statements and pay within three months of each quarter-end.
Legal Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change, and the application of laws can vary widely based on specific facts and circumstances.
Readers should not act upon this information without seeking professional counsel tailored to their individual situation. Expanship and its authors disclaim any liability for actions taken or not taken based on the content of this article.
For specific advice regarding your business setup, compliance requirements, or any legal matters, please consult with qualified legal and tax professionals in the relevant jurisdiction.
