Mauritius Positions Itself as Gateway to Africa
2012-06-18
Mauritius
On 7 May 2012, Mauritius signed a Double Tax Avoidance Agreement (DTAA) and Investment Promotion & Protection Agreement (IPPA) with Kenya. Taxand Mauritius examines this new relationship further, looking at the benefits the DTAA will bring for investors in Mauritius and Kenya.
To date, Mauritius has a total of 16 DTAAs (13 of which have been ratified) and 18 IPPAs signed with African countries, with a growing number of bilateral agreements.
The main articles of the Mauritius/Kenya DTAA are:
| Income | Withholding tax rate (WHT) under DTAA | WHT in Mauritius | WHT in Kenya |
| Dividend | 5%/10% (1) | Nil | 10% |
| Interest | 10% | 10% (2) | 15%/25% (3) |
| Royalties | 10% | 10%/15% (4) | 20% |
| Capital gains on disposal of shares | Taxed only in the resident state | Nil | Nil |
(1)5% applies where beneficial owner owns at least 10% of the company paying out the dividends/10% applies in all other cases
(2) Applicable on payment to non-residents/no WHT where payment is being made from a Global Business Company
(3) 15% applies to bank interest/25% in other cases
(4) 10% on payments to resident/15% on payments to non-residents/no WHT where payment is being made from a Global Business Company
Further, the Mauritius/Kenya DTAA provides for tax-sparing credit, and this will not dilute any incentive that has been given in Kenya. Other articles which follow the OECD model are in respect of Mutual Agreement Procedures, Assistance for Collection of Taxes, and Exchange of Information articles.
Taxand's Take
Mauritius is positioning itself as a safe, trusted and well-established international financial centre, while consolidating its aspirations to be the natural choice of business and investment gateway into Africa.
Your Taxand contact for further queries is:
Gyaneshwarnath Gowrea
E. gary.gowrea@cim.mu
T. +230 405 2002