The Mauritius Financial Services Commission issues policy stand on the application of the Core Income Generating Activities requirements for Global Business Companies

The Financial Services Commission (“FSC”) has confirmed that, with effect from January 1st, 2022, only holders of / applicants for a Global Business Licence (“GBL”) wishing to avail of a preferential tax advantage should demonstrate that their Core Income Generating Activities (“CIGA”) are / will be carried out, in or from Mauritius at all times.

Therefore, only Global Business Companies (“GBCs”) wishing to benefit from the Partial Exemption Regime (“PER”) which entitles them to an exemption of 80% on certain streams of income such as interest or dividends, or income derived by GBCs on certain activities which are licensed and regulated by the FSC, are required to demonstrate their CIGA in Mauritius.

This is a much welcomed development for the global business industry and a relief for GBCs for which preferential tax advantages are not available or applicable. Previously, there was uncertainty on whether meeting the CIGA requirements was a condition attached to the licence of GBCs or if this was part of the substance requirements only for GBCs wishing to avail of preferential tax advantages.

It is noteworthy to mention that all GBCs can still claim tax credit in Mauritius for any tax suffered on foreign sourced income as an alternative to claiming benefit under the PER.

Regardless of the above, the FSC and the tax authorities will still require GBCs to be managed and controlled in Mauritius to ascertain their tax residence, which will then enable them to take advantage of the various tax treaty benefits that are available to tax resident vehicles.

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