Tax and accounting regulations

A coherent offshore tax planning strategy is essential to maximize the effectiveness of offshore companies. Eltoma can assist by structuring the most tax efficient strategy to satisfy your requirements. Eltoma will guide you as to which jurisdictions offer the best tax structure by identifying the types of tax payable as well as applicable exemptions and incentives. Eltoma will provide tax planning advice that will identify which is the most favorable tax efficient jurisdiction in which to incorporate.

Below is an overview of the tax and accounting regulations for GBC1 and GBC2 Companies in Mauritius.

Corporation Tax:

  • GBC1 - Utilizes the unilateral foreign tax credit which stands at 80% of the Mauritian Tax Rate, which leaves a residual liability of 20% of the Mauritian rate which is equal to 3%. There are current discussions on possible further reductions on this rate.
  • GCB2 – 0% tax rate on worldwide profits

Income Tax:

  • GBC1 – Income tax is 15% however can be reduced to 3% due to foreign tax credits
  • GBC2 – No taxation on income

Royalties:

  • GBC1 – No payment of taxation on royalties. Royalty fees paid to foreign affiliates are allowed as expense items.
  • GBC2 – No payment of taxation on royalties

There following are exempt from tax for both a GBC1 and a GBC2: Dividends, Interest, Capital Gains, Capital Duties or Net Worth.

International aspects of taxation:

  • Compliancy – Anti-avoidance regulation is strictly enforced.
  • Transfer Pricing – There is no specific legislation in Mauritius tax code.
  • Double Taxation Treaties - GBC1 – Mauritius has signed Double Taxation Treaties with the several countries including: China, India, Germany, France, the UK, Singapore, South Africa, Italy, Malaysia and Indonesia.
  • Double Taxation Treaties - GBC2 – Cannot take advantage of the Double Taxation Treaties as these companies are not tax resident in Mauritius.

Annual reporting requirements:

  • GBC1 – Required to file an audited profit and loss account and balance sheet annually with the Financial Services Commission within 6 months of the financial year end. Accounts must be prepared in accordance with internationally accepted accounting standards. Tax returns must be filed with the Income Tax Authorities.
  • GBC2 – Required to produce financial statements to reflect the financial position. Annual accounts must be filed with the authorities within six months of the balance sheet date and details of the beneficial owner along with an outline of the company objectives must be submitted to the Financial Services Commission. No audit is required.

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Register a Mauritius company.
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  Resources:

OECD publishes compliance review for all non-compliant jurisdictions

OECD publishes compliance review for all non-compliant jurisdictions

The OECDs global tax transparency initiative was launched last year in April 2016, with the purpose of encouraging every jurisdiction across the world to commit to implementation of a CRS (Common Reporting Standard) for automatic exchange of information by 2018, and to sign the Multilateral Convention on the exchanging of tax data. A forum on behalf of the OECD has released the results of its review for jurisdictions it considers to be non-compliant.

EU Parliament Committee release findings & recommendations for current offshore taxation measures

EU Parliament Committee release findings & recommendations for current offshore taxation measures

A formal enquiry into the Panamanian law firm Mossack Fonseca has been launched by the European Parliament's Committee, which found gaps in beneficial ownership transparency for trusts and fiduciaries and didn’t meet the EU standard.

2017 G20 summit: Enforcement of taxation highest priority

2017 G20 summit: Enforcement of taxation highest priority

The 2017 G20 leaders’ summit took place in Hamburg last week where the European Commission Council and leaders discussed the priorities and primary projects for the upcoming summit. EC President Jean-Claude Juncker has stated that advancing the global combat against tax evasion is top of the list.

The EC takes action against advocates promoting tax avoidance schemes

The EC takes action against advocates promoting tax avoidance schemes

The European Commission has recommended the implementation of a new regulation regarding companies or intermediaries who promote or design cross-border tax planning schemes will going forward be required to provide full disclosure to the tax authorities of their relevant jurisdiction within five days of offering them to clients.

What are the new Beneficial Ownership reporting requirements for BVI companies?

What are the new Beneficial Ownership reporting requirements for BVI companies?

Going forward, a new regulation will require certain British Virgin Islands companies to gather and retain details of Beneficial Owners with 25% or more of the company’s shareholding rights, with an ongoing requirement to keep the details up to date.

Russian citizens can gain Cyprus tax residency by staying only 60 days on island, whats the catch?

Russian citizens can gain Cyprus tax residency by staying only 60 days on island, whats the catch?

Cyprus is once again working to improve its economic desirability and will be able to increase its alternative business base for Russians with good creditworthiness.

Cyprus tax department releases new guidance on CRS deadlines and the online portal

Cyprus tax department releases new guidance on CRS deadlines and the online portal

The Cyprus Tax Department has released a notification to all Cyprus based Financial Institutions & Service Providers of the new guidance notes on the Automatic Exchange of Financial Account Information and other information relating to the Common Reporting Standard (CRS).

Hong Kong establishes AEOI agreement with Indonesia

Hong Kong establishes AEOI agreement with Indonesia

Last week, Hong Kong finalised and signed an agreement with Indonesia to allow for the automatic exchange of financial information (AEOI) regarding all tax matters.