Effective 1 January 2019, the deemed tax credit regime was abolished and replaced by a partial exemption regime on qualifying income. In order to benefit from this preferential tax regime, entities are required to satisfy certain conditions relating to the substance of their activities.
As a reminder, effective 1 January 2019, the deemed tax credit regime whereby companies holding a Category 1 Business Licence were entitled to claim a deemed tax credit of 80% was abolished and replaced by a partial exemption regime on qualifying income.
In order to benefit from this preferential tax regime, consistent with the Income Tax Regulations 1996, entities are required to satisfy certain conditions relating to the substance of their activities as follows:
The Financial Services Commission (FSC) has clarified vide Circular, dated 17 January 2022, that CIGA requirements will only apply to those holders or applicants for a Global Business Licence (“GBL”) wishing to avail of the preferential tax regime. Accordingly, GBLs not claiming partial exemption are not required to meet the CIGA requirements.
Mauritius enacted progressive measures aligned to OECD’s BEPS initiatives with the objective to enhance the International Financial Centre’s competitiveness and transparency, including the phasing out of the deemed tax credit regime. The Circular brings further clarity and tax certainty, welcomed by the global business community.”
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