Answer ... Several specific anti-avoidance rules apply to corporate taxpayers with regard to:
- interest on debentures issued by reference to shares;
- excessive remuneration or share of profits;
- excessive remuneration of shareholders or directors;
- benefits to shareholder;
- excessive management expenses; and
- leases for other than adequate rent.
There is no case law on the specific anti-avoidance rules.
Answer ... Mauritian law also includes a main general anti-avoidance rule which seeks to prevent transactions whose sole or dominant purpose is to obtain a tax benefit, having regard to several factors, including the manner in which the transaction was entered into or carried out and the form and substance of the transaction.
The interpretation of the main general anti-avoidance rule has been the subject of case law at the Supreme Court level, which has focused on the interpretation of ‘dominant purpose’. No additional principles have been derived from case law.
- Controlled foreign company (CFC) rules: CFC rules were introduced to the Mauritian fiscal legislation in 2019. Where a Mauritius tax-resident company carries on business through a CFC and the Mauritius Revenue Authority considers that the non-distributed income of the CFC arises from non-genuine arrangements which have been put in place for the essential purpose of obtaining a tax benefit, that income will be deemed to form part of the chargeable income of the Mauritius company.
- Transfer pricing: There is no specific transfer pricing legislation, but there is a general arm’s-length provision in the fiscal legislation. There is no thin capitalisation requirement in Mauritius.
- Limitation on losses: The Mauritius Revenue Authority is empowered to revise the quantum of losses available for set-off or carried forward for a taxpayer.
Interest deductions: The Mauritius Revenue Authority may refuse to allow a deduction on expenditure incurred as interest where it is satisfied that:
- the interest is payable to a non-resident which is not chargeable to tax on the amount of the interest; or
- the interest is not likely to be paid in cash within a reasonable time.
Answer ... Yes, any person – including a corporate entity – that derives or may derive any income may apply to the Mauritius Revenue Authority for a ruling as to the application of the income tax legislation to that income. The ruling of the Mauritius Revenue Authority is binding on the latter and is published for the benefit of the public.
Answer ... There is no specific transfer pricing legislation, but the main fiscal legislation contains a general arm’s-length provision.
Answer ... The Mauritius Revenue Authority is statutorily empowered to conduct assessments on taxpayers. However, it is debarred from doing so once three years have elapsed since the year of assessment.