To optimize corporate tax liabilities in Mauritius, businesses can leverage a range of incentives and strategies tailored to specific sectors and activities.
The first area is Research and Development (R&D) expenditure. Companies incurring qualifying R&D expenditures directly related to their existing trade or business may deduct twice the amount of the expenditure in the income year in which it was incurred, provided the R&D is carried out in Mauritius and no annual allowances have been claimed on the same. Moreover, Income derived from the export of goods is subject to a tax rate of 3%, incentivizing local manufacturers to expand their reach in international markets.
Similarly, companies operating in the Freeport zone are subject to a reduced tax rate of 3% on income derived from the sale of goods on the local market, provided certain substance conditions are met Special Economic Zones (SEZ): Businesses operating in SEZ benefit from tax exemptions on import duties for materials needed for daily operations and other sector-specific incentives.
Manufacturing companies investing in artificial intelligence and patents can claim a 15% tax credit over three years. Companies that subscribe to the share capital of a tax incentive company listed on the Stock Exchange can claim a 10% tax credit of the amount paid in cash, spread equally over two consecutive income years, subject to a maximum credit of MUR 300,000.
Mauritius has signed DTAs with several countries, including the UK, to avoid double taxation and ensure that companies only pay income tax in the state where the assets are physically located.
DSG can assist to leverage Sector-Specific Incentives by identifying and capitalizing on tax incentives available for your industry, such as R&D credits, IP exemptions, and green economy initiatives. We will assist you in taking advantage of investment tax credits for capital expenditures in areas like AI, patents, and modernization projects. We ask clients to consider establishing operations in SEZ to benefit from tax exemptions and other sector-specific incentives. Lastly, we regularly review and adjust your tax strategy to align with evolving tax laws and incentives in Mauritius.
