Mauritius Finance Bill 2026: An Overview of the Key Measures

Overview of Key Measures in the Finance Bill 2026 and the Economic and Financial Measures (Miscellaneous Provisions) Bill 2026

The publication of the Finance Bill 2026 (No. XII of 2026) and the Economic and Financial Measures (Miscellaneous Provisions) Bill 2026 (No. XIII of 2026) marks a significant phase in implementing the Government’s fiscal and regulatory agenda following the Budget Speech 2026-2027, introducing a wide range of amendments across the tax, financial services, corporate, employment, immigration, and public health landscapes, with key themes including tax reforms such as a new progressive personal income tax scale with a 35% top band, amendments to the Corporate Climate Responsibility (“CCR”) Levy, and the introduction of an Insurance Premium Tax; social and employment rights enhancements including significant expansions to maternity and paternity leave and the introduction of menstrual leave; and immigration reforms including the introduction of a Golden Visa. This report provides a comprehensive overview of the key measures, their effective dates, and their potential implications for businesses and individuals operating in or considering Mauritius as an investment and operational hub.

Tax Measures: Key Reforms and Adjustments

1. Corporate Tax

Corporate Climate Responsibility (“CCR”) Levy

The CCR Levy, introduced as a 2% levy on the chargeable income of companies, has been refined in the Finance Bill. The key amendments address both payment mechanisms and the availability of tax credits.

• Payment through Advance Payment System (“APS”): A company required to submit APS statements will now pay the CCR Levy quarterly:
  • For each of the first three quarters: 25% of the CCR Levy, computed on the chargeable income specified in section 50C of the Mauritius Income Tax Act (“ITA”), payable with the APS statement.
  • For the last quarter: The balance (25%) payable with the annual income tax return under section 116 of the ITA.
• Transitional Relief: The CCR Levy payable under APS statements will be phased in with the following reductions:
  • 75% reduction for APS statements due between 1 July 2026 and 30 June 2027.
  • 50% reduction for APS statements due between 1 July 2027 and 30 June 2028.
  • 25% reduction for APS statements due between 1 July 2028 and 30 June 2029.

This provides a significant transitional relief for businesses adjusting to the new payment mechanism.

• Tax Credit Restrictions: A central provision in the Bill stipulates that the CCR Levy shall not be reduced by any tax credit, other than the specified manufacturing tax credit and any tax credit available under a Double Taxation Agreement (“DTA”).
• Interaction with Double Taxation Agreements (“DTAs”) and Foreign Tax Credits (“FTCs”):

The restriction on foreign tax credits against the CCR Levy is a significant development for the international business community. To understand its impact, it is helpful to consider how foreign tax credits typically operate under Mauritius’ tax system:

• Under a DTA: Where a Mauritian company receives foreign-source income (e.g., dividends) from a country with which Mauritius has a DTA, the DTA typically requires Mauritius to provide relief for foreign taxes suffered (withholding tax and underlying corporate tax). This relief is granted by way of a foreign tax credit against the Mauritian tax liability on that income. The credit is limited to the amount of Mauritius tax attributable to that foreign income.
• The CCR Restriction in Practice: Under the Bill, a foreign tax credit can still be used to reduce the ordinary Mauritius corporate income tax liability (15%) on foreign income. However, that same foreign tax credit cannot be used to reduce the CCR Levy (2%).
  • Where a DTA applies: Where a DTA expressly requires Mauritius to grant relief for foreign tax, that treaty protection extends to the CCR Levy. In practical terms, if the foreign tax suffered is sufficient to cover both the 15% corporate tax and the 2% CCR Levy, the investor may be fully protected. However, the availability and extent of this relief depend on the specific provisions of the applicable treaty.
  • Where no DTA applies: Where the foreign jurisdiction does not have a DTA with Mauritius, the CCR Levy becomes an unavoidable additional cost. The foreign taxes suffered in the source country cannot be credited against the CCR Levy, resulting in an effective 2% surcharge on foreign-source income that has already been taxed abroad. This is a particular concern for investments into African jurisdictions where Mauritius’ treaty network is not comprehensive.
• Policy Implications: While the recognition of treaty credits provides a crucial safeguard for investments routed through Mauritius’ extensive treaty network, the absence of DTA protection for income from non-treaty jurisdictions may affect Mauritius’ attractiveness as a gateway to African markets. The measure may therefore encourage investors to carefully assess treaty access and the effective tax cost of routing investments through Mauritius.
• Effective Date: Gazette date

Qualified Domestic Minimum Top-up Tax (“QDMTT”)

The Finance Bill introduces several technical refinements to the QDMTT framework, including definitional changes (updating the “covered person” reference to section 50Q, narrowing “excluded person” to investment funds and real estate investment vehicles only where they are ultimate parent entities, clarifying “financial accounting net income or loss” to include intra-group adjustments, and amending “fiscal year” to include the calendar year where the deemed consolidation test is met), filing and payment changes (requiring submission within 15 months and extending the amendment period from 2 to 3 years), and a penalty reduction from 5% to 2.5% (effective from gazette date), with the definitional, filing, and assessment changes deemed effective from the year of assessment commencing 1 July 2025.

Global Business Entity Definition

The definition of “global business entity” in section 2 of the ITA is amended to narrow the qualifying criteria for foundations and trusts, effective for the year of assessment commencing on 1 July 2027.

• Fondation: A foundation qualifies only where:
  • The founder is a non-resident or holds a Global Business Licence.
  • All beneficiaries appointed under the terms of a charter or will are, throughout an income year, non-residents or hold a Global Business Licence.
  • The foundation’s purpose is carried out outside Mauritius.
• Confiance: A trust qualifies only where:
  • The settlor is a non-resident or holds a Global Business Licence.
  • All beneficiaries appointed under the terms of the trust are, throughout an income year, non-residents or hold a Global Business Licence.
  • The trust is a purpose trust under the Trusts Act and its purpose is carried out outside Mauritius.
• Trustee of a unit trust scheme: A trustee who is a non-resident or holds a Global Business Licence is now included in the definition.
• Effective Date: Year of assessment commencing on 1 July 2027

Corporate Social Responsibility (“CSR”) Remittances

The minimum percentage of a CSR Fund that must be remitted to the Mauritius Revenue Authority (“MRA”) is increased to 75% for CSR Funds set up on or after 1 January 2027, while the minimum remains at 50% for funds set up from 1 January 2026 to 31 December 2026. The effective date will be the gazette date.

Export of Goods – Live Animals Excluded

The definition of “export of goods” in section 2 of the ITA is amended to exclude the export of live animals. This means the reduced corporate income tax rate of 3% will no longer be available on profits from the export of live animals with effect as from the Gazette date.

Income Tax Holidays

• Captive Insurance: The 10-year income tax exemption for captive insurers licensed before 19 June 2026 is extended by an additional period not exceeding 5 years, starting from the date of expiry of the 10-year period, subject to substance requirements.
• Investment Certificate by EDB: For a company holding an Investment Certificate issued by the Economic Development Board, the 8-year income tax exemption period will begin in the income year in which the company starts its operations, rather than the income year in which it is incorporated.
• Start-up Enterprise Exemption: A 10-year income tax exemption from the date of operations is introduced for a start-up enterprise which:
  • Is set up on or after 19 June 2026 and managed in Mauritius.
  • Conducts its business operations in Mauritius or Africa.
  • Falls under the National SME Incubator Scheme of the Mauritius Research and Innovation Council and is supported by an accredited incubator.
  • Has an annual turnover not exceeding MUR 100 million.
• Repeal of Deductions: The following deductions are repealed effective from the year of assessment commencing on 1 July 2027:
  • 150% deduction on expenditure incurred by hotels on cleaning, renovation and embellishment works in the public realm.
  • 200% deduction on expenditure incurred by a higher education institution on joint tertiary education contracts with African universities.

Manufacturing Company Tax Credit

The qualifying period for the 15% tax credit on capital expenditure incurred by a manufacturing company on new plant and machinery, artificial intelligence, and patents is extended from 30 June 2026 to 30 June 2029. Unrelieved credits may be carried forward for a period of 10 years. Effective Date: Gazette date.

ICT Services – Source of Income and Tax Deduction at Source

• Source of Income: Income derived from the provision of specified ICT services supplied in Mauritius will be treated as Mauritius-source income. ICT services include the supply of software, software licences, software applications, software maintenance services, and distance maintenance of programmes and ICT equipment.
• Tax Deduction at Source (“TDS”): Two new TDS obligations are introduced:

Where either payment is made to a non-resident, the applicable TDS rate may be reduced under the relevant double taxation agreement. Effective Date: Gazette date.

2. Personal Tax

New Individual Income Tax Rates

The Fair Share Contribution for individuals has been abolished and a new progressive personal income tax scale is introduced:

This represents a significant shift in Mauritius’ personal tax architecture, moving towards a more progressive system based on ability to pay. While the 35% top rate is a notable increase from the previous effective rates, it aligns Mauritius more closely with other jurisdictions and removes the economic double taxation on local dividends that existed under the Fair Share Contribution regime. Effective Date: From 1 July 2026

Programme de visa d'or

A Golden Visa is introduced for non-citizens, with holders benefiting from the same tax treatment as Premium Visa holders. Foreign-source income from work performed remotely is taxable only upon remittance to Mauritius, while amounts spent using a foreign credit or debit card are not regarded as remitted income, and funds deposited into a Mauritian bank account are not taxed where a declaration is provided that taxes have already been paid abroad. The Golden Visa is a welcome initiative to attract high-net-worth individuals, with the remittance basis of taxation positioning Mauritius competitively against other jurisdictions offering similar schemes. Effective Date: Gazette date.

Increase in Exemption Threshold for Lump Sum

The exemption threshold for any lump sum received by way of death gratuity, consolidated compensation for death or injury, or commutation of pension is increased from MUR 3 million to MUR 3.5 million. Effective Date: 19 June 2026.

3. Value Added Tax (“VAT”) and Indirect Taxes

Time of Supply

The time of supply for VAT purposes is expanded to include the earlier of the issue of an invoice, receipt of payment, or 3 months from the date the supply is delivered or performed. This applies to periodic payments like rent and lease agreements. Effective Date: 1 October 2026.

Foreign Supplier of Digital or Electronic Services

• No tax representative is required for a foreign supplier of digital or electronic services to comply with VAT filing requirements.
• The foreign supplier is required to be VAT registered if its turnover of taxable supplies exceeds or is likely to exceed MUR 3 million.
• No compulsory VAT registration is required where the services are supplied exclusively to VAT registered persons.
• Online marketplaces are now expressly included as digital or electronic services. “Online marketplace” means a digital platform connecting sellers and buyers for the supply of goods and services, including websites, portals, application stores, and digital distribution platforms, but excluding platforms that solely process payments electronically.
• The removal of the mandatory tax representative requirement and the exemption from registration where services are supplied exclusively to VAT-registered persons are welcome simplifications that reduce the compliance burden on foreign suppliers. The inclusion of online marketplaces brings Mauritius in line with international trends in taxing the digital economy.
• Effective Date: 1 October 2026.

Taxe sur les primes d'assurance

A new Insurance Premium Tax of 5% is introduced on the value of premiums paid under general insurance business, excluding reinsurance contracts and non-Mauritian policies. Payment and returns are due monthly, with a penalty of MUR 2,000 per month (max MUR 20,000) for late returns and 10% plus 1% interest for late payment. Non-compliance attracts fines up to MUR 1 million and imprisonment up to 8 years. The 5% tax will directly impact customers, but the exclusion of reinsurance and non-Mauritian policies preserves the competitiveness of Mauritius’ international insurance sector. Effective Date: 1 January 2027.

VAT Reclassification

• Management Services: The supply of services by a holder of a management licence under the Financial Services Act to:
  • Corporations holding a Global Business Licence;
  • Trusts whose settlor and the majority of beneficiaries are non-residents; or
  • Foundations whose founder and the majority of beneficiaries are non-residents,

is reclassified from zero-rated to exempt. This means related input VAT becomes irrecoverable, potentially increasing costs for management companies and their clients. Effective Date: 1 October 2026.

4. Property: Duties and Taxes

Registration Duty on Non-Citizen Acquisitions

• Repeal of Increase: The increase in registration duty from 5% to 10% for non-citizens acquiring residential property under EDB Property Schemes, which was due to take effect from 1 July 2026 under the Finance Act 2025, is repealed. The general rate of 5% will continue to apply. This is a welcome reversal that demonstrates the Government’s responsiveness to concerns raised by investors and industry stakeholders. It maintains Mauritius’ attractiveness as an investment destination. Effective Date: Gazette date.

5. Tax Administration

Accords de conformité

A new formal settlement mechanism is introduced, allowing the Mauritius Revenue Authority (“MRA”) and a taxpayer to enter into a binding compliance agreement before the MRA issues an assessment, a claim, or a notice of determination of objection.

• Content: The agreement must specify the matters agreed, the amount of tax, penalties, surcharges, and interest payable, and payment terms. The taxpayer must declare that all material facts have been fully disclosed.
• Effect: The taxpayer waives any right to object or appeal against the matters covered by the agreement.
• Reopening: The MRA may reopen the agreed matter where material information was unavailable or withheld, or where the taxpayer fails to comply with the terms.

The compliance agreement mechanism is a welcome tool for early resolution of tax disputes. However, the ability of the MRA to reopen the agreement where new information emerges may create uncertainty and potentially discourage voluntary participation. The effectiveness of this mechanism will depend on the MRA’s approach to its implementation. Effective Date: Gazette date.

Revenue Tribunal – Appeal Deposit

The amount payable on lodging an appeal to the Revenue Tribunal is set at 5% of the amount determined or MUR 5 million, whichever is lower. The list of appealable determinations is updated to include determinations under the Customs Act, the Customs Tariff Act, the Excise Act, the Gambling Regulatory Authority Act, the Income Tax Act, the Land (Duties and Taxes) Act, and the Value Added Tax Act.

Employment Law

1. Menstrual Leave

The Workers’ Rights Act 2019 is amended to introduce one day’s menstrual leave per month on full pay for every female worker during the period she remains in employment. A day on which a worker is on menstrual leave shall not be deemed to be absence from work for the purposes of sick leave provisions. While this measure supports employee well-being, safeguards may be needed to ensure that enhanced leave entitlements do not inadvertently result in indirect discrimination against women in the workplace. Employers should review their policies to accommodate this new entitlement. Effective Date: 1 January 2027.

2. Maternity Leave

Maternity leave is extended from 16 to 26 weeks on full pay, of which at least 14 weeks must be taken immediately following confinement where part of the leave is taken before confinement. A female worker may opt to take up to an additional 26 weeks of maternity leave on half pay following the 26-week period. Effective Date: 1 January 2027.

3. Paternity Leave

Paternity leave is extended from 4 consecutive weeks to 6 consecutive weeks. Effective Date: 1 January 2027.

Conclusion

The Finance Bill 2026 and the Economic and Financial Measures (Miscellaneous Provisions) Bill 2026 represent a significant and wide-ranging legislative package touching virtually every aspect of Mauritius’ economic and regulatory landscape.

The Government has demonstrated a willingness to respond to stakeholder concerns, most notably by reversing the increase in property transfer tax for non-citizens from 10% to 5%, maintaining Mauritius’ attractiveness as an investment destination. For the international business community, the most significant concern remains the restriction on foreign tax credits against the CCR Levy. While treaty credits provide a crucial safeguard for treaty partners, the absence of DTA protection for non-treaty jurisdictions creates the potential for an additional 2% tax cost on certain foreign-source income, particularly relevant for investments into African jurisdictions where the treaty network is not comprehensive, and the cumulative impact over multiple years may materially affect cash flows and returns.

The significant enhancements to employment rights, including extended maternity and paternity leave and the introduction of menstrual leave, reflect a progressive approach to worker welfare, though employers will need to review their policies to accommodate these new entitlements.

The personal tax reforms, including the new progressive tax scale and the Golden Visa scheme, position Mauritius competitively in the global competition for talent and high-net-worth individuals.

Overall, while certain measures raise legitimate concerns about tax neutrality and competitiveness, the package as a whole represents a balanced approach to fiscal consolidation, regulatory enhancement, and economic modernisation, and it is hoped that continued consultation will further refine the legislative framework in the interest of Mauritius’ long-term competitiveness as an International Financial Centre.

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