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Tax snapshot (1/4)

Corporate income tax

• The reduced 3% export corporate tax rate withdrawn where profits derive from exports of live animals.

• Hotel annual allowance on capital expenditure halved from 30% to 15%.

• Commencement of the EDB Investment Certificate tax exemption now runs from the start of operations rather than date of incorporation.

• 10-year tax holiday for captive insurance companies extended by a further 5 years (for licences issued before 19 June 2026).

• Global Business Entity definition clarified to exclude trusts/foundations where the settlor/founder or beneficiaries are residents.

• Fair Share Contribution recast: the MUR 24 million supplies / VAT-registration trigger removed; liability now hinges solely on chargeable income exceeding MUR 24 million.

• Non-resident suppliers of software, software licences, applications, maintenance and remote ICT services confirmed liable for Mauritius income tax.

• Partial exemption regime for investment advisers and asset managers broadened to cover management of non-securities instruments (loan receivables, mortgage-backed exposures, invoice financing).

• Investment tax credit of 15% over 3 years (45% total) on new plant, machinery, AI solutions and patents; unrelieved credit carried forward for 10 years; scheme extended to qualifying investment up to 30 June 2029.

• QDMTT aligned with OECD GloBE rules: fund/REIT MNE-parent exemption (from 1 July 2025), intra-group consolidation adjustments allowed, 15- month filing window, amendment period extended from 2 to 3 years, and non-payment penalty cut from 5% to 2.5%.

• Corporate Climate Responsibility levy moved to quarterly advance payment (APS), phased from 25% in FY27 to full APS by FY30; no offset of unused or foreign tax credits permitted.

• Allowable deductions removed (from 1 July 2026): 150% deduction for hotel cleaning/renovation/embellishment, and double deduction on Joint Tertiary Education contracts with African universities.

• Corporates may now retain up to 25% of their CSR Fund (remitting at least 75% to the NSIF via MRA), down from a maximum of 50% retention.

Personal income tax

• A new tax band is being introduced. Income between MUR 1 million and MUR 12 million will be taxed at 20%. Beyond MUR 12 million, income will be taxed at 35%. The Fair Share Contribution is being removed.

• Four-year income tax exemption for qualifying expatriate employees of solar photovoltaic (PV) system manufacturers.

• Tax-free threshold on lump-sum pension, retiring or severance allowances raised from MUR 3 million to MUR 3.5 million.

• The disturbance allowance for public officers on tour of service in Rodrigues or the Outer Islands is clarified as tax-exempt.

• Monthly income support for non-Basic Retirement Pension (BRP)-eligible over 60s raised from MUR 10,000 to MUR 10,370 (effective January 1, 2026).

VAT

• No increase in VAT.

• Management-licence (FSC) services to GBC corporations and non-resident trusts/foundations moved from zero-rated to VAT-exempt.

• Payment services by BOM-licensed providers to GBC corporations made zero-rated, for a level playing field.

• Foreign digital/electronic-services suppliers eased: No VAT registration where supplying only VAT-registered persons (reverse charge applies), no tax-representative requirement, and no compulsory registration below MUR 3m annual turnover.

• Online marketplaces and digital platforms expressly brought within ‘digital and electronic services’.

• New VAT exemptions/zero-rating:

• E-books (exempt), common salt (zero-rated, local or imported)

• Postal services (zero-rated, previously exempt)

• Photovoltaic systems and components (not subject to VAT)

• Hotels and tourist residences required to remit 50% of VAT in foreign currency.

• VAT exemption on accommodation extended to qualifying international sports events and TV/cinema awards events; sports-federation entrance fees and donated sports goods exempted.

• NGOs/NPOs funded under NSIF Instrument 1 exempted from VAT on donated goods from abroad.

• VAT-ruling fees raised for individuals from MUR 3,000 to MUR 5,000, and for companies, sociétés and trusts from MUR 15,000 to MUR 75,000.

Customs duty

• 15% duty on quartz countertop slabs abolished (20 June 2026).

• Semi-knocked-down 20%-value-addition exemption scrapped to curb abuse.

• Imported wine used in excisable production relieved from double taxation.

Excise duty

• Alcohol excise up 10%, except beer and wine (20 June 2026). Expected incremental revenue for FY27: MUR 400 million.

• Tobacco excise up ~10% across cigars, cigarillos and cigarettes (20 June 2026). Expected incremental revenue for FY27: MUR 1 billion.

• New annual fees for retained/personalised vehicle registration marks.

• Excise exemption for carers of disabled adults; traffic fines must be cleared before licence renewal.

Plastics and sugar

• MUR 2 PET-bottle excise extended to all plastic bottles (1 October 2026).

• Sugar-content excise raised from 12 to 15 cents/gramme (20 June 2026); broadened to sweets, jams, biscuits, wafers and similar products (1 October 2026), with a personal-use exemption (expected incremental revenue for FY27: MUR 825 million)

Customs form fee and property taxes

• MUR 150 processing fee on Simplified Customs Assessment Forms (1 September 2026).

• NHDC/NSLD transfers to syndicates exempted from registration and transfer duties.

• Registrar-General search and special duties increased; land surveyor report duty now charged per lot.

Expected impact

Corporate income tax (CIT) measures represent a rebalancing of incentives rather than a significant increase in the overall corporate tax burden. Legacy incentives for sectors such as tourism are being scaled back, while new measures seek to encourage investment, automation, productivity enhancement, and innovation. Changes affecting the global business sector are largely defensive in nature, aiming to maintain compliance with international tax standards and safeguard the credibility of Mauritius as an international financial centre. Consequently, the incidence of these measures falls disproportionately on the tourism and global business sectors, while companies involved in live animal exports will face a higher tax burden.

Personal income tax (PIT) measures remain relatively contained. A new tax band will apply a 20% rate on annual income between MUR 1 million and MUR 12 million, while income above MUR 12 million will be taxed at 35%. Concurrently, the Fair Share Contribution (FSC) will be abolished. These changes effectively integrate the FSC, originally introduced last year for a three-year period, into a permanent feature of the tax code. Because PIT is not the primary source of fiscal consolidation, its limited impact on the broader tax base helps contain pressure on household consumption and supports the social acceptance of wider fiscal adjustments, including pension reform.

The main fiscal gains are expected to come from VAT and other indirect taxes, supported by higher excise duties on alcohol, tobacco, sugary products, and plastics. These measures broaden the revenue base while pursuing public health and environmental objectives. Enhanced tax administration and compliance powers further support revenue mobilisation without relying heavily on tax rate increases.

Overall, the package is broadly supportive of the sovereign credit profile as it strengthens revenue mobilisation and fiscal sustainability while maintaining Mauritius' international tax competitiveness. However, the greater reliance on consumption taxes may introduce distributional challenges. Furthermore, the concentration of targeted measures on tourism and global business warrants close monitoring, given the critical importance of these sectors to macroeconomic growth, exports, and foreign exchange earnings.

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