Mauritius: what taxation for expatriates?

Mauritius attracts many expatriates each year in search of a pleasant daily life, under the sun and in a multicultural environment. One of the factors that weighs heavily in this decision is undoubtedly the advantageous taxation offered by the country. What does the Mauritian tax system concretely hold for those who wish to settle there to work, invest, or spend their retirement? Here’s everything you need to know about the main tax principles and the practical implications of this appealing destination for foreign residents.

Mauritian Taxation: Key Characteristics

The reputation of Mauritius is not solely based on its heavenly beaches. The simplicity and clarity of the tax system are among its major assets. This country adopts a particularly encouraging approach towards taxpayers, whether they are entrepreneurs, employees, or retirees coming from abroad.

Unlike many jurisdictions, the Mauritian regime stands out for several key points: single tax rate of 15% on income tax, absence of capital gains tax, absence of dividend tax, as well as no wealth tax or inheritance tax. These measures largely explain why the archipelago attracts so many international profiles.

Single Tax Rate of 15%

One of the unique features praised by foreign residents is the application of the single tax rate of 15%. All taxable income is subject to the same rate, whether one is an employee, entrepreneur, or retiree. This concept is a clear departure from progressive models, which are sometimes regarded as more complex and less predictable for the expatriate taxpayer.

This flat tax not only simplifies administrative management but also provides a sense of peace when planning one's financial situation. The tax deductions never exceed this threshold, regardless of the source or amount of income earned in Mauritius.

Absence of Capital Gains and Dividend Taxes

Another advantage for those who own an investment portfolio is the absence of capital gains tax, which fully secures wealth arrangements. Any sale of shares, real estate resale, or realization of other capital-related profits remains exempt under certain conditions, as long as these transactions are carried out locally.

It is also difficult not to mention the absence of dividend tax. This means that the profits generated by companies based in Mauritius fully benefit their beneficiaries. For many investors, this provision represents a true accelerator of wealth.

A Very Light Wealth Tax

Unlike many European countries, Mauritius does not impose either a wealth tax or inheritance tax. Those who choose to establish their tax residence in Mauritius can organize the transfer of their assets with complete peace of mind, without fearing significant deductions from their savings upon death.

The absence of wealth tax also allows holders of substantial means to increase, diversify, or transfer their wealth according to their choices, while securing each operation in the long term. This is a compelling argument, especially for international families and business leaders.

Tax Residence in Mauritius: What Rules to Follow?

Settling there requires mastering the criteria for obtaining tax resident status in Mauritius. This concept is primarily based on two distinct rules: the famous 183-day rule and the so-called 270-day rolling rule over three calendar years. They determine access to the benefits offered by the local tax regime.

Effectively obtaining tax resident status entails certain consequences: the resident is then taxed only on their Mauritian-source income and on certain transfers from abroad, but many sources of income remain exempt depending on their nature and origin.

Understanding the 183-Day Rule and the 270-Day Rule

To obtain tax resident status, one often just needs to stay in Mauritius for more than 183 days in total during a calendar year. A precise count of entries and exits from the territory is therefore necessary, as this duration of presence is what matters.

Alternatively, Mauritius offers an additional rule. It is possible to become a resident if one accumulates at least 270 days of presence spread over three consecutive years. This is perfectly suited for individuals with a more nomadic lifestyle or who split their time between multiple homes internationally.

• Presence in Mauritius exceeding 183 days during the calendar year
• Or accumulated presence of 270 days over three fiscal years

Tax Reporting Obligations to Anticipate

Any expatriate becoming a tax resident