Dividend Tax in Mauritius: Residents & Non-Residents

Understanding Dividend Tax in Mauritius: An IntroductionCopy link to section

Mauritius does not impose a withholding tax on dividends. The domestic rate is fixed at 0%, and dividends paid by a resident company are exempt from income tax in the hands of the shareholder, whether that shareholder is an individual or a company. This treatment flows from the Income Tax Act 1995, the principal statute administered by the Mauritius Revenue Authority.

The position applies equally to domestic recipients and to foreign shareholders receiving distributions from a Mauritian entity. No tax is deducted at source on the way out, and no separate dividend distribution tax exists to capture the same profits a second time.

This article explains how that exemption works, the narrow cases where a distribution can fall outside it, and the levies that can still touch dividend income at the level of large companies and high earners. It is written for non-resident owners, investors, and their advisers weighing whether to hold or route investments through a Mauritian company.

The Legal Basis: How the Income Tax Act 1995 Treats DividendsCopy link to section

Income tax in Mauritius applies to the chargeable income of a business. Dividends paid from a resident company are excluded from the recipient's chargeable income, and that exclusion is the legal foundation of the exemption.

The statute that sets this out is the Income Tax Act 1995, supported by the Income Tax Regulations 1996. The version consolidated to May 2026 is maintained by the Mauritius Revenue Authority and published in full.

Where foreign-source income enters the picture, two further instruments come into play: the Income Tax (Foreign Tax Credit) Regulations 1996 and the country's double-taxation agreements. These matter for dividends earned abroad, not for distributions made by a local company.

Later amendments have reshaped parts of the framework. The Finance Act 2021 revised the treatment of trusts and foundations, in part to reduce the risk of Mauritius appearing on OECD listings for harmful tax practices.

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Why Mauritius Does Not Tax Dividends at Distribution: The Single-Layer PrincipleCopy link to section

Corporate profits in Mauritius are taxed once. The standard corporate income tax rate is 15%, and once profit has borne that charge, distributing it as a dividend triggers no further tax.

Taxing the same profit again at distribution would be double taxation, and the law avoids it by exempting the dividend entirely. This logic holds regardless of who receives the payment.

• Dividends from resident companies are exempt in the hands of corporate shareholders.
• The same dividends are exempt in the hands of individual shareholders.
• No separate dividend distribution tax applies on top.

The single-layer principle is written into both the corporate and individual sides of the tax code, which is why the exemption is consistent across recipient types.

Dividends Received by Resident Companies: The Domestic ExemptionCopy link to section

A resident company that receives a dividend from another resident company pays no tax on it. The income is carved out of the recipient's taxable base.

Unlike participation exemptions in many countries, this relief carries no minimum shareholding and no holding-period condition for domestic dividends. A small stake and a large stake are treated alike.

Transparent entities work differently. A société is not taxed as an entity; its associates are taxed on their share of its income, so dividend flows through a société are taxed only at the partner level.

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Dividends Paid to Non-Resident Shareholders: No Tax at SourceCopy link to section

When a Mauritian company distributes a dividend to a non-resident, nothing is withheld. The payment leaves the jurisdiction without any deduction at source.

This is the practical meaning of a 0% domestic rate: a foreign parent, fund, or individual shareholder receives the gross amount declared. No filing or clearance is needed in Mauritius to secure that outcome.

Treaty rates for dividends exist on paper across the country's agreements, but they are moot here. A treaty can only reduce a source-country rate that already sits at zero, so the dividend article in those agreements rarely changes anything.

There is also no inheritance or succession tax, so dividend-derived wealth is not caught by a secondary levy on transfer.

Dividends in the Hands of Resident Individuals and the MUR 3 Million ThresholdCopy link to section

For a resident individual, a dividend from a local company is exempt from income tax. The exemption is the starting point, but two separate contributions can still reach larger dividend recipients.

The first is the Solidarity Levy. Although the dividend itself is exempt from income tax, it counts toward leviable income, and an individual whose leviable income exceeds MUR 3 million pays the levy at 25% on the excess, capped at 10% of leviable income.

Since the 2019-2020 income year, an associate in a société must declare his share of that entity's dividends as part of leviable income. The flow-through nature of the société is reflected directly in the individual's return.

The Finance Act 2025 added a Fair Share Contribution for high earners. Effective from the income year beginning 1 July 2025 and for the two following years, an individual whose net income exceeds MUR 12 million, including domestic dividends and shares of société dividends, pays 15% on the amount above MUR 12 million.

Foreign dividends received by an individual are taxed differently. They attract income tax at 15%, with credit for any foreign withholding tax suffered, and the 80% partial exemption is not open to individuals.

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Treatment of Foreign-Source Dividends and the 80% Partial ExemptionCopy link to section

Dividends earned abroad by a resident company are taxable in Mauritius at 15%. The company then chooses between two reliefs to reduce that charge.

The first option is the 80% partial exemption on the gross amount received, which leaves only 20% in the taxable base. Applied to the 15% rate, that produces an effective rate of 3% on the foreign dividend.

The second option is a credit for foreign tax suffered, supported by documentary evidence. Where the recipient holds at least 5% of the paying company's share capital, the credit can extend to underlying tax on the profits behind the dividend, not just any withholding tax at source.

The two reliefs cannot be combined. A company that claims the 80% partial exemption forgoes the foreign tax credit on that income.

Conditions apply to the partial exemption:

• The company conducts its Core Income Generating Activities in Mauritius.
• It meets the prescribed level of substance.

• The foreign dividend must not have been deducted in the source country; a deductible payment does not qualify.

These substance rules mean the 3% effective rate is earned through genuine local activity, not granted automatically by residence.

What Counts as a "Dividend": Qualifying Distributions and Narrow ExceptionsCopy link to section

The exemption rests on the payment actually being a dividend. In Mauritius, a dividend is a distribution authorised by the board, made out of retained earnings after accumulated losses have been made good, paid to shareholders in cash or in shares.

A payment that fails this test is not a dividend, and tax may be withheld when it is paid. Repayments of share capital, premium distributions, and informal returns of funds are the typical examples that fall outside the definition.

The concept is extended in two directions. A distribution to a trust beneficiary is deemed a dividend, and distributions by a trust or foundation to beneficiaries are likewise treated as dividends for tax purposes.

Re-characterisation can also work against a taxpayer. The MRA may disallow an interest deduction and treat the payment as a dividend, particularly where interest is owed to a non-resident not chargeable to tax on it, or where it is unlikely to be paid in cash within a reasonable period.

Practical Implications for Companies, Investors and Holding StructuresCopy link to section

The most common acquisition vehicle is a holding company with a Global Business Licence. It combines the 80% partial exemption on foreign dividends, subject to substance, with access to a network of around 46 double-taxation agreements covering India, China, Singapore, South Africa, and the United Kingdom.

Zero withholding on outbound dividends makes the jurisdiction efficient for repatriating profits from African and Asian investments to investors anywhere. There is no incremental tax leakage at the distribution stage.

Two newer levies deserve attention for larger structures:

The Climate Responsibility Levy is significant because it bites on exempt income, which includes domestic dividends received by a company. A holding company with large dividend inflows should model this 2% charge even though the dividends themselves are exempt from income tax.

The corporate Fair Share Contribution carries broad exclusions. It does not apply to companies holding a GBL, to entities exempt from income tax or on a tax holiday, or to income otherwise exempt from tax.

Two structural points round out the planning picture. There is no group tax consolidation, so each entity is modelled on its own, and treaty benefits can be refused under the principal purpose test where a structure exists mainly to access favourable rates elsewhere.

The Outlook for Dividend Taxation in MauritiusCopy link to section

The core architecture looks stable. A 0% withholding rate on dividends and a full exemption for domestic-source dividends are not under active legislative threat in the available sources.

Pressure is building at the top of the market rather than the middle. The Qualified Domestic Minimum Top-up Tax took effect for years of assessment from 1 July 2025 and applies to Mauritius-resident members of multinational groups with consolidated revenue of at least €750 million in two of the last four fiscal years.

For those groups, the levy ensures a minimum effective rate of 15% in Mauritius, with a top-up where the combined rate falls short. The previously effective 3% rate on foreign dividends would be topped up to 15%, changing the economics for in-scope groups, though investment funds, pension funds, and real estate vehicles are excluded.

The Fair Share Contribution for high earners points the same direction at the individual level, targeting net income above MUR 12 million including dividends. Commitments under the OECD BEPS plan on transparency and preferential regimes reinforce the trend.

For mid-market investors and companies outside large multinational groups, the no-withholding rule on dividends is expected to persist. Absent a budget announcement to the contrary, the exemption that defines dividend treatment in the jurisdiction remains the working assumption.

ConclusionCopy link to section

For a non-resident owner weighing where to hold and repatriate profits, the absence of source taxation on outbound dividends is the structural fact that matters most, because it means the Mauritius entity itself does not erode the distribution before it reaches you. The definition of what actually qualifies as a dividend under Mauritian law deserves the same attention as the exemption, since a payment that falls outside that definition could attract a different treatment entirely and quietly undermine the arrangement.

How Expanship Can Help Your Business in MauritiusCopy link to section

Expanship supports foreign owners in confirming the dividend position for their structure, from verifying the 0% outbound rate to modelling the Climate Responsibility Levy and the partial exemption conditions that affect holding companies. The same team handles the wider compliance work a foreign-owned entity needs once it is established.

• Company formation, including Global Business Licence structures
• Registered agent and registered office services
• Tax registration and preparation of annual filings
• Ongoing compliance and statutory deadline management
• Accounting and bookkeeping aligned to local requirements
• Introductions to banking partners for corporate accounts

To discuss your dividend planning or set up an entity, contact Expanship Mauritius.

Frequently Asked QuestionsCopy link to section