Recent Mauritius tax changes
In the last week, there have been some notable tax announcements made in respect of Mauritius. We summarise these below. Let us know what you think about these recent Mauritian tax changes in the comments below!
Mauritian Tax Changes: Termination of the Zambia/Mauritius DTA
One unexpected announcement made was in respect of the termination of the Zambia/Mauritius double taxation agreement (“DTA”).
Zambia is required to provide notice of termination of the DTA to Mauritius by 30 June of a calendar year. Assuming this was done before 30 June 2020 in Zambia, the DTA will cease to apply in the last day of the calendar year, i.e. 31 December 2020. For Mauritian purposes, the DTA will apply until 1 July 2021. The Zambian Government have indicated that they intend to initiate negotiations of a new DTA which will introduce shared taxing rights and anti-abuse clauses.
Clarification of the Mauritian solidarity levy
After the Mauritian budget speech on 4 June 2020, there was an outcry regarding the proposal to increase the solidarity levy from 5% to 25% and the fact that it appeared to apply only to Mauritian citizens and not to other Mauritian tax residents.
Due to this, the Mauritian Minister of Finance has now announced that the solidarity levy will apply to all Mauritian tax residents who earn “leviable income” greater than Rs3m.
“Leviable income” for this purpose is the sum of net income, plus dividends, less the dependents exemption allowed.
The Minister of Finance also clarified that the solidarity levy would be capped at 10%. This will result in no individual paying more than 25% tax in Mauritius on their total income. The legislation is still to be published and finalised despite it being expected to take effect from 1 July 2020.
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