Tax reforms in Mauritius: A comprehensive guide for foreign investors
The Mauritius Budget for the fiscal year 2024-2025 heralds significant tax reforms aimed at nurturing a robust environment for foreign investors. These changes are strategically implemented to boost economic resilience, drive sustainable development, and align with global regulatory standards. Blue Azurite gives you a detailed overview of the key tax amendments and their implications for foreign investors considering Mauritius as a business destination. Corporate tax reforms Introduction of the Corporate Climate Responsibility (CCR) Levy A pioneering addition to the tax structure is the Corporate Climate Responsibility (CCR) Levy, which mandates a 2% levy on the profits of companies. This levy targets enhancing environmental sustainability but exempts companies with annual turnovers below 50 million Mauritian rupees. The revenue generated from this levy will fund initiatives to protect and restore Mauritius’ natural ecosystems and tackle climate change challenges. Revisions to the Partial Exemption Regime (PER) The Partial Exemption Regime (PER) has been modified to include: Adjustments for specific sectors Significant adjustments have been made for the medical, biotechnology, and pharmaceutical sectors. Income derived from intellectual property assets by companies in these industries will now be taxed at 15%, a substantial increase from the earlier rate of 3%. This adjustment is intended to conform to international taxation standards. Enhanced tax incentives for innovation and social contributions Expansive tax exemptions The government is committed to providing continuous support for digital and infrastructural innovation through the following measures: Additional deductions and credits Boosts for manufacturing and creative industries Incentives for Manufacturers An investment tax credit of 15% over three years will now include expenditures on AI and patents, recognizing these as critical components of modern manufacturing. Furthermore, recycling processes have been classified under manufacturing activities, making them eligible for existing manufacturing incentives. Expansion of the Premium Investor Certificate (PIC) The PIC has been extended to encourage private investments in the creative industry, covering new sectors such as concert venues and theaters. This move aims to stimulate the cultural sector, creating a more vibrant local economy. Reforms to the Freeport Act and VAT policies Freeport Act changes The amendments to the Freeport Act allow a company to hold both a Global Business Licence and a Freeport certificate, although such entities will not qualify for the tax holidays previously available to Freeport operators. VAT adjustments Enhancements to VAT (Value Added Tax) regulations include: Support for Green Initiatives The Mauritian government extends a 10% refund (capped at MUR 200,000) on the importation value of electric cars and goods vehicles until June 2025, promoting the adoption of environmentally friendly transportation options. Conclusion Overall, the Mauritius Budget 2024-2025 introduces transformative tax reforms that cater extensively to foreign investors. By aligning its tax policies with global standards and promoting sectors like technology, environmental sustainability, and the arts, the country is reinforcing its position as an attractive and progressive investment hub. These strategic changes promise to enhance the country’s economic landscape, making it an even more appealing destination for international business operations. If you’re looking to start a new business venture in Mauritius, learn how these reforms will impact your project by contacting Blue Azurite. Our team of experts is here to guide you through the procedures to make your business project a success.
Seychelles remains committed to tax reforms to comply with the European Union standards
Following its inclusion on the EU list of non-cooperative tax jurisdictions on 18 February 2020, the Government of Seychelles has issued a press release on 21 February 2020 to explain the rationale of why they have been included in that list and to confirm its commitments for tax reforms to comply with the EU standards as quickly as possible. Seychelles are already in dialogue with representatives from the Conduct Group on Business Taxation (CoCG) of the European Commission to address the concerns of the EU which is to ensure that its territorial tax regime applies only to entities that can demonstrate sufficient “economic substance”. In that respect, the Government of Seychelles intends to introduce more detailed substance requirements in line with the international best practices whereby it will be ‘taxing the worldwide profits of its resident persons, where these persons do not sufficiently demonstrate that they are conducting activities in Seychelles, when compared to the amount of foreign income they are generating.” Seychelles intend to implement these reforms by the end of March 2020 deadline to ensure it adheres to the EU requirements. Kindly refer to the attached article.
