Our advice: taxes in Mauritius

Taxation of expatriates in Mauritius, overview of the main aspects ...

 

To emigrate to another country. Many think about it. Looking for a more lenient climate, wish to maximize its standard of living ... The motivations can be many. For some, the tax framework can also be an additional or even decisive asset. Depending on the chosen country, those who settled abroad can indeed benefit from a particularly advantageous tax framework. Mauritius is quoted among the countries most advantageous for its very privileged tax system.

 

 

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Tax Residency in Mauritius

What are the rules for determining your tax residency? Will my residency permit in Mauritius suffice to become a tax resident in Mauritius? What are the formalities to be done before departure abroad to be tax-resident in Mauritius? The year of departure what statements to make in France? What are the tax steps to be done in Mauritius? What is the S.I.P.N.R ? 

Determination of the location of the tax residence

You can only be a tax resident in one country.

 

Having a residence permit or a residence and work permit (occupancy permit) in Mauritius is not enough to make you a Mauritian tax resident for the French administration. The tax benefits you will benefit from Mauritius depend very much on the length of your stay on the island. If you spend more than six months a year in Mauritius, you have the opportunity to Benefit from resident status Tax and tax benefits that are attached.

 

For the determination of the tax domicile, whether you are French or foreign, you are no longer considered as having your tax domicile in France, since you fulfil the following criteria:

  • You don't work in France anymore. If you have more than one activity, it is the main activity that is taken into account. The main activity is the one to which you spend the most time or that which gives you most of your income.
  • Your home or place of the main stay is no longer in France. This is the place of the habitual residence having a permanent character. The decisive element is the length of your stay attested if necessary by examining the dates of entry and exit visas stamped on your passport.

 

You will become a Mauritian tax resident the year in which you can justify having a Residence permit in Mauritius and justify having spent more than half of your time in Mauritius and/or out of France more than 183 days. 

The declarative formalities in case of change

If you do not meet the conditions for the residence in Mauritius in tax terms and your tax domicile remains in France, you are liable to tax in France on all your income, including the remuneration of your eventual activity or the Rental income in Mauritius. You will not be taxed in Mauritius. You must file your income tax return with your principal residence, without any changes to your previous situation.

 

What are the formalities if, on the other hand, your tax domicile does not stay in France and you become a tax resident in Mauritius. The departure abroad will have resulted in the transfer of the tax domicile to Mauritius. For the French tax administration, you will have acquired the tax status of non-resident.

  • Before you leave, you must Communicate your new address abroad at the tax center who sent you your last tax notice. Since January 1, 2005, it is no longer necessary to pay its tax balance before departure, it is sufficient to declare the change of address at the centre of Public finances or centre of taxes of its place of residence of January 1st of the year.
  • The year following your departure, you will send your income tax return to your former principal residence in France, or you will make it online at www.impots.gouv.fr. This Declaration will include your income from 1 January to the date of your departure abroad. French source revenues will be reported on printed n ° 2042 NR and if you have foreign source income on this period, you will also need to file a declaration No. 2047. There will also be a statement in Mauritius.
  • In the following years, you will have to send your tax returns to the non-resident tax centre by indicating only French-source income or for real estate taxes if you continue to own or rent a several real estate properties in France. You will report online at www.impots.gouv.fr or send your 2042 return to Non-resident personal tax Service. The S.I.P.N.R will therefore become your only single interlocutor for the payment and management of your tax returns.     

The Franco-Mauritian tax convention

 

What is the purpose of a tax treaty for non-double taxation? What does the Franco-Mauritian tax convention provide for? What taxes are involved in the non-double taxation of French and Mauritian income taxes? Ewb? What about the exchange of tax information between France and Mauritius?  Is my bank account in Mauritius to be declared? 


The principle of non-double taxation

     The purpose of the bilateral tax treaties is to avoid that income which has its source in a state and which is levied by a person who is tax-domiciled in another State or resident of that other state is taxed twice.

 

The tax Convention between France and Mauritius tending to Avoid double taxation on income taxes and on capital was signed on 11 December 1980 in Port Louis between the Government of the French Republic and the Government of Mauritius.

 

It is accompanied by a protocol which forms an integral part of the Convention. Act No. 82-483 of 10 June 1982 (O.J. of 11 June 1982, p. 1840) authorized the approval of this Convention on the French side which was published by Decree No. 82-912 14 October 1982.

 

 

It entered into force on September 17, 1982. This Convention has been amended by an Endorsement signed on June 23, 2011 In Port-Louis and Law n ° 2012-320 of 7 March 2012 authorised the approval of the French side of this endorsement, which was published by Decree No. 2012-816 of 25 June 2012. This endorsement came into force on 1 May 2012. This amendment amends article 27 of the Convention providing for Exchange of information and enhanced information between the tax administrations of the two countries. 

What are the revenues involved?

Article 2 : " are considered as taxes on income and on capital taxes levied on total income, on total assets, or on items of income or wealth, including taxes on gains from the disposition of movable or immovable property, taxes on the overall amount of wages paid by the companies, as well as capital gains taxes. "

 

Article 3 : "The current taxes to which the Convention applies are:

a) with regard to France: Income tax and Corporate tax, including all deductions at source, all accounts and advances counted on the taxes referred to above,

(b) As regards to Mauritius: income tax.

 

Article 6 : "The income that a resident of a state draws from Real Estate (including income from agricultural or forestry holdings) located in the other state are taxable in that other state.

 

Article 18 : Pensions: 1. Subject to the provisions of article 19, paragraph 2, Pensions and similar remuneration paid to a resident of a state in respect of an earlier employment shall be taxable only in that state.

2. Notwithstanding the provisions of paragraph 1, pensions and other sums paid under the social security legislation of a State shall be taxable only in that state.

3. The provisions of paragraph 1 shall not apply where the beneficiary of the income is not liable to tax for such income in the state of which he is a resident, in accordance with the legislation of that state.

In this case, these incomes are taxable in the state from which they originate. 


Taxes in Mauritius

Mauritius has tax advantages that will delight the French, and especially the retirees. Mauritius is in the "Top 10" world of the best destinations for retirees in terms of taxes. Mauritius has a particularly attractive tax system. Settling in retirement and benefiting from the status of resident in Mauritius is to have an idyllic living environment and to be sure to reduce taxes; To pay less taxes and benefit from the many other benefits related to the Mauritian resident status.

Overview of taxes in force in Mauritius, for taxes that exist! ... 

 


Taxes and tax formalities

For all that is taxes in Mauritius, the Mauritius Revenue Authority will be your sole interlocutor especially for income tax. The annual tax return to Mauritius must be filed on 30 September at the latest with an additional deadline expiring on 15 October for a tax return with online payment.

As long as your good faith cannot be challenged, the services of the tax Administration will be benevolent and will not hesitate to guide you, help you or give you some advice to allow you to meet your tax obligations by the rules. For all taxes in Mauritius, see the site of the Mauritius revenue Authority

The main taxes

Income tax

 

Income tax is fixed at 15%. The fiscal year in Mauritius is on June 30th. In Mauritius, you will not be taxable and you will be exempted from making an income tax return if your net income does not exceed a certain amount. Are deductible the sums paid for the benefit of health insurance and those corresponding to the interest of a bank loan for the acquisition of a principal residence. In Mauritius, it is therefore the flexibility and simplicity that prevails, compared with the complexity of the many French tax systems.

 

Solidarity tax on the ISF fortune

 

There is no solidarity tax on fortune in Mauritius. So the real estate you own in Mauritius will not be in the calculation of the value of your heritage for a possible ewb in France. The positive point therefore is that the French do not have to pay EWB on their real estate, their homes and their Mauritian apartments even if they are tax residents in France. On the other hand, all taxpayers, including those who are tax residents in Mauritius, will pay the capital tax (ISF) in France on their real estate retained in France. Knowing that there are no taxes on fortune in Mauritius, the analysis of the provisions set out above leads many French retirees to wish to become residents of Mauritius with tax domicile on the island, to "lighten" their heritage real estate in France to no longer pay EWB in France or at the very least reduce the taxable basis to constitute a non-taxable real estate property at EWB in Mauritius.

 

French spring pensions

 

For the part of your pensions imposed on Mauritius, the income tax rate will be 15% as for other income and for your pensions in France, your tax will be levied at the source by each pension fund. In autumn of 2014, a parliamentary report on "The Exile of the forces Vives de France" recalled the way in which the French expatriate retirees are treated fiscally. The general principle is that French pensions collected abroad be taxed in France via a withholding tax in three slices (0%, 12% and 20%), on the basis of article 4 A of the general taxation code. However, because of the many conventions signed by France, this rule rarely applies entirely. In line with the general principles of the Model Tax Convention defined by the OECD, if pensions served in return for rights acquired in the framework of public functions are most often in the debtor country, pensions serve IES for jobs in the private sector are generally taxable in the country of residence. This is the case for Mauritius. The case of pensions from employment in the private sector and in the public sector should therefore be distinguished. (Public service pensions, corporate pensions and public institutions, social security pensions, i.e. compulsory (non-public service), basic and supplementary pensions, privately-funded (life insurance, Personal retirement savings). By simplifying, the rules applicable to Mauritius country of residence are summarised as follows: You receive a private pension and/or alimony: it is taxable in Mauritius at a height of 15%. You receive a public pension: it is taxable in France. You receive a pension from the basic schemes of social security and compulsory supplementary schemes: it is taxable in France. Pensions constituted by contributions to voluntary old-age insurance, basic or supplementary, are assimilated by the tax administration to social security pensions. The same is the case for pensions paid by business or branch plans where the employee's membership is compulsory. The rules for the taxation of pensions collected abroad are therefore not simple, and depend on many factors. It is essential to take advice from a specialist to study precisely the individual case you are presenting.

 

Social levies

 

For social levies on the incomes of non-resident French retirees, the tax framework is very advantageous. Only insured persons domiciled in France and responsible for a compulsory French sickness insurance scheme are subject to the levy of the CSG and the CRDS by the Cnav (National old-age insurance fund). Retirees based abroad are therefore not subject to the CSG or the CRDS. Retirees abroad are also escaping from CASA, the solidarity contribution for Autonomy introduced in 2013, with a rate of 0.3%. In certain cases where a social security agreement has been signed between the host country and France, retired employees who reside in tax-residing abroad continue to depend on the French health insurance scheme. The health insurance premiums withheld from your pensions are in the order of 3.2% on the basic pension and 4.2% on the supplementary pension and 7.1% for self-employed persons plans. Retirees then benefit from a connection to the regime of their country of residence and can return to France for treatment. In the case of Mauritius, in the absence of a social security agreement, your social protection will be ensured by the French Overseas Fund and by supplementary private insurance if necessary. You will not pay any more contributions to the French Social security scheme, but you will have a cover allowing you to be reimbursed and to be treated on-site in Mauritius or in France.

 

Real estate taxes

 

There is no housing tax in Mauritius and no property tax. The only tax is a now unified tax of 5% of the value of the perceived property paid on the occasion of the purchase of a real estate in one of the real estate programs reserved for foreigners or on the occasion of the acquisition of an apartment. Not covered by the Franco-Mauritian tax convention, income of a real estate nature (land income, rents collected etc.) is taxable only in the state where the property is situated. Thus the rents levied on real estate located in France will be taxed in France, while those of Mauritius will be taxed in Mauritius, under income tax. Inheritance rights there are no direct online inheritance rights in Mauritius. The properties located in Mauritius are therefore exempt from succession rights in France as well as in Mauritius. However, the owner and heirs must be Mauritian residents. If one or the other is a French resident, the inheritance rights of the French regime will apply. For more details, see our Estates section