MAURITIUS COUNTRY UPDATE
Regulatory Sandbox Licence Introduction of Limited Liability Partnership Relaxation of Listing Rules Additional substance requirement for companies holding category one global business licence Changes in the tax regime applicable to global business companies A blueprint elaborated by the Ministry A platform for trading of derivatives and commodities
Strengthening of AML CFT Framework Set of of the Economic Development Board Introduction of Innovator Occupation Permit A Business and Investment Platform for Africa will be established to facilitate joint prospects by Mauritius enterprises in Africa Encourage research and development and promote export of manufactures goods- fiscal incentives Tax holiday to domestic companies engaged in manufacturing on the manufacturing of pharmaceutical products, medical services and high tech products, and the income derived from innovative intellectual property assets developed in Mauritius
Solidarity levy of 5% imposed on high income earners Negative income tax system for low income earners Signature of the multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Sharing in July 2017 Caveat out 19 DTAs favouring bilateral negotiations
COMMON REPORTING STANDARDS Trusts have been particularly targeted and may be obliged to report information in relation to their beneficiaries, settlors, protectors and trustees. In certain instances this would include the value of settlors and beneficiaries interests in a trust. Trusts are flagged at the very outset in the introduction to the CRS. Emphasis is laid on the fact that reportable accounts include accounts maintained or held by entities which are trusts. The institutions (often including the trust itself) responsible for reporting on these accounts are also required to look through passive entities to report on individuals that ultimately control these entities. It is clear that there is an agenda in the CRS to ensure that trusts cannot be used by individuals as a shield against reporting requirements.
COMMON REPORTING STANDARDS The basic principles Like FATCA, the CRS is, at its heart, an international tax information gathering project, based on automatic information exchange rather than exchange of information on request. However unlike FATCA, which is concerned solely with gathering tax information for the US tax authority in respect of US citizens, the goal of the CRS is to gather tax information about persons resident in each country participating in the CRS (Participating Jurisdictions) and held by financial institutions situated in other Participating Jurisdictions and reporting that information back to the tax authorities of the Participating Jurisdiction of the resident. Treatment of trusts and similar structures under the CRS Understanding the treatment of trusts under the CRS depends on an understanding of the classification, due diligence and reporting processes of the CRS rules. Reporting in Mauritius as from September 2018
Some key points. Trusts administered by a professional corporate Trustee will in most cases have to report on the value of its beneficiaries and settlors interest in the trust. The value of discretionary beneficiaries interest in a trust will only be subject to reporting if a distribution has been made to them. In relation to discretionary beneficiaries, distributions in 2015 may already trigger some disclosure obligations. A trust which is a Passive NFE will have to disclose to Reporting FIs with which it holds accounts information in relation to its settlors, protectors, beneficiaries and trustees where they are treated as Controlling Persons. If a trust is a Passive NFE, there will be no reporting requirements in relation to the value of beneficiaries or settlors interests in the trust. The FI with which a trust that is a Passive NFE holds a reportable account will report on the full value of the account together with details of the trust s controlling persons.
CROCIANI CASE Exclusive jurisdiction clause Forum for administration Simple drafting
MAURITIUS TRUST LANDSCAPE Hybrid legal system Trust Act 2001 Inheritance of property: Lex rei sitae Lex Domicili Tax planning
Estate Planning in Mauritius Use of Mauritius trust for estate, succession- planning and family office services Other uses: corporate finance/ asset financing, asset protection, tax planning, securitisation However, any disposition to a trust in breach of forced heirship rules by a settlor who is a non citizen will be void to the extent that such disposition exceeds the quotite disponible Foundations
TAXATION Income tax Resident concept Taxed on worldwide income Non resident taxed on income derived from sources within Mauritius Personal income tax: 15% Corporate tax rate: 15% GBC 1 GBC 2 No Capital Gains Tax Witholding Tax Other taxes
Tax Treaties IPPAs Tax Information exchange agreements Residence and domicile No foreign exchange Foreign ownership restrictions Due diligence requirements Headquarter companies Fintech companies
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Sphere Management (Mauritius) Limited Write to us at: info@sphere-management.com SPHERE MANAGEMENT (MAURITIUS) LIMITED 6th Floor, Suite 605, St James Court, St Denis Street, Port Louis, Republic of Mauritius Phone: +230 2116726 Fax: +230 2114076 Disclaimer: While due care has been taken in the preparation of this document, Sphere Management (Mauritius) Ltd does not accept responsibility for any loss suffered by any person or entity relying on the information contained in this proposal or arising from any shortcoming, defect or inaccuracy through inadvertence or otherwise. The contents are based on legislation prevailing at the time of publication and are subject to change. Readers are strongly recommended to consult their tax and legal advisers before taking any action based on this information. The contents of this proposal are made available for information purposes only and on the understanding that Sphere Management (Mauritius) Ltd is not providing professional advice.