The budget for 2016 – 2017 was provided on 29 July 2016 to the National Assembly by the Minister of Finance and Economic Development.
The main proposals of the Budget on income taxes are summarized below:
-Tax holidays for companies holding licences for Global Headquarters Administration, Treasury Management, Asset and Fund Managers with minimum AUM of USD100m, international firms with Global Legal Advisory Services, Investment Banking and Corporate Advisory services and Overseas Family Corporations and Foreign Ultra High Net Worth Individuals investing a minimum of USD25m, subject to meeting substance and employment condition;
– Extension and expansion of existing provisions that allow certain manufacturing companies to offset their tax liabilities with 5% of their investments in new plant and machinery;
-An enhanced investment tax credit of 15% for capital investment made by a company in its subsidiary engaged in certain activities;
-A 5 year tax holiday for foreign high-net-worth individuals investing a minimum of U.S. $25 million in Mauritius Repeal of customs duty on approximately 368 tariff lines, with a goal to make Mauritius a “duty-free island”;
– Reduced excise tax on certain hybrid motor cars;
–New enterprises set up by individuals or co-operative societies registered with the Small and Medium Enterprise Development Authority (SMEDA) will be granted an 8-year tax holiday;
–Enterprises registered with the SMEDA with a turnover of less than MUR 10 million and engaged in qualifying activities under the same scheme will be given a 4-year tax holiday. The tax holiday will start as from the year of assessment 2016-17;
–An 8-year tax holiday new incentive scheme will be introduced to attract industrial fishing companies to operate from Mauritius. The purpose of the measure is to contribute to the development of Mauritius as a seafood hub and
–Cooperative societies will be exempt from corporate income tax on all non-sugar agricultural activities.
The budget did not provide clarity as to how measures to address harmful tax practices, as prescribed by the European Union or the OECD base erosion and profit shifting (BEPS) recommendations, would be addressed or implemented.