Mauritius: Finance Act 2026 introduces changes to income tax and VAT, including amendments to Pillar Two rules and rules for suppliers of digital services

The Finance Act 2026 and the Economic and Financial Measures (Miscellaneous Provisions) Act, published on August 12, 2026, introduces the following tax-related changes:

Corporate tax

• Clarifications were made to the domestic minimum top-up tax (DMTT) regime applicable to multinational enterprise (MNE) groups with annual consolidated revenue exceeding €750 million, including exemptions for certain investment funds and real estate investment vehicles that are ultimate parent entities
• The filing period for amended DMTT returns was extended from two to three years, and the penalty for nonpayment was reduced from 5% to 2.5%
• Corporate Climate Responsibility (CCR) levy payments will be made quarterly through advance payment system returns, with transitional reductions in levy amounts and continued use of certain foreign tax credits
• Chargeable income exceeding MUR 24 million will become the sole criterion for liability for the Fair Share Contribution (FSC) applicable to companies
• New withholding tax rules apply to certain information and communication technology services and digital promotion services
• A 10-year tax incentive was introduced for qualifying start-up enterprises meeting specified conditions
• Certain existing tax incentives were extended, while others were repealed

Individual tax

• The FSC for individuals was repealed and replaced by a new 35% income tax band applicable to chargeable income exceeding MUR 12 million per year beginning with the income year commencing July 1, 2026
• A four-year income tax holiday was introduced for qualifying noncitizen employees engaged in the manufacturing of solar photovoltaic systems
• The exemption threshold for certain pension, retirement, and severance payments increased from MUR 3 million to MUR 3.5 million
• Golden Visa holders will benefit from tax treatment similar to that available to Premium Visa holders, including provisions relating to foreign-source employment income and remittances

VAT

• Clarifications were provided regarding VAT registration obligations for foreign suppliers of digital or electronic services
• Foreign suppliers will not be required to register for VAT if annual taxable supplies are below MUR 3 million or when services are supplied exclusively to VAT-registered persons
• Electronic books were excluded from the definition of digital or electronic services and were added to the list of zero-rated supplies
• A 5% insurance premium tax was introduced for general insurance business carried on in Mauritius, effective for policies entered into or renewed on or after January 1, 2027
• The period for claiming input VAT credits was reduced from 36 months to 24 months
• Management services supplied by management companies to certain global business entities, trusts, and foundations will become VAT-exempt rather than zero-rated beginning October 1, 2026

Tax administration

• The Income Tax Act now includes a definition of “principal officer” for purposes of director and officer liability provisions
• A compliance agreement framework was introduced to facilitate early settlement of tax matters before assessments or objections are finalized
• Tax agent qualification requirements were expanded in advance of the registration regime scheduled to apply from January 1, 2027
• Additional information-reporting obligations were introduced for utility providers, insurers, and certain persons dealing with virtual assets

Read an August 2026 report prepared by the KPMG member firm in Mauritius, which also covers:

• Property taxes
• Global business and regulatory measures
• Immigration rules