The income tax Mauritius system is governed by the income tax act and according to this law, the Mauritius residents are subject to pay tax for their worldwide income. The only exception to this law is when the income from the foreign source is taxable only when it is remitted to Mauritius. However, there is no exception for the resident companies and they have to pay tax on foreign income, regardless of the income remitted to Mauritius or not. The non-resident is also fallen under the tax law and they have to pay tax on the Mauritius source of income. Any company shall regard as the Mauritius Company if the company incorporated in Mauritius and the central management and control of the company lie in Mauritius.
Tax year & tax rate for Income Tax Mauritius
Companies in Mauritius have to pay tax in a year of assessment about the income from the previous year for income tax Mauritius. The income year starts from 1 July each year and ends on 30 June next year. For individuals, the tax return has to submit by 30 September and pay tax following the income year. Companies and other taxable organizations also have to submit tax return of their income and pay tax to the authority for 6 months from the ending of the month of the accounting year of the company. However, if the accounting year ends in June and if there is no tax is payable or there is a declared loss then the company may submit a tax return before 15 January of the next year. Additionally, according to section 116 of tax act, if the company’s accounting year-ends in the month of June and company already submitted APS statement for the fourth quarter then the submission date of tax return and payment can be made before 31 January of the next year.
According to income tax act Mauritius, the income tax rate is 15% and that, is payable by all companies including the taxable body corporate? According to the section of income tax act Mauritius, the income tax is applicable to all the emoluments including all fees, allowance. If these fees or allowance is not money but worth money then income tax, Mauritius is also applicable. Companies have to pay tax for business profits and that includes professional income. If the company or individuals earn from rent, royalty or any other form of income that is derived from the property then income tax Mauritius is also applicable as well. Additionally, the tax is applicable to dividends, charges, annuity etc. Individuals have to pay tax on basic retirement pension and any other form of income. However, according to income tax act Mauritius part 1 of the second schedule, there are certain bodies or individuals that are exempt from paying tax. These categories of exempt bodies and individuals are listed in part 2 second schedule and this includes the dividends payable to the shareholders by the resident company, regardless that the shareholders are resident or nonresident of the country.
The corporate income is defined in section 44 to 47 at income tax act and based on this law, all schemes of a unit trust, collective investments, and any trust and foundations have to pay a flat rate tax that is 15%. In Mauritius, all the dividends paid or any distribution is made by all the corporate bodies that reside in Mauritius are exempt from paying tax. Additionally, the society that may be a partnership does not have to pay tax in Mauritius. However, the partners are subject to the taxable entity and they have to pay tax on their share of income whatever the income is distributed or not. In addition, the limited partnership company in Mauritius falls under the category of society and these types of organization are not also the taxable entity while its partners are required to pay tax for their income. In Mauritius, banks have to pay a special levy that calculated based on their reference book of profit, income that earned from operation etc. There is a chart in income tax act Mauritius, section 50G to 50J and that describe the detail amount that to pay by the banks.
Losses in income tax Mauritius
According to income tax act Mauritius, any loss cannot deduct from the employment income and company may carry any kinds of unrelieved loss for a period of maximum 5 years. Additionally, there are certain types of expenditure of the company that is not allowable to deduct for income tax purpose. This includes any kind of capital expenditure, any kind of provision, any kind of business entertainment or gift, all income tax or foreign tax that the company has to pay towards foreign government etc.