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Mauritius Ratifies DTAA with Egypt

Mauritius

Mauritius have ratified their Double Taxation Agreement (DTAA) with Egypt. There is also a Protocol which has been signed on the same date. Taxand Mauritius takes a look at the potential advantages of using a Mauritius company for investments in Egypt.

Where a resident of Mauritius derives income or gains from Egypt, the amount of tax on that income or gains payable in Egypt may be credited against the Mauritius tax. Further where a company resident in Egypt pays a dividend to a resident of Mauritius who controls directly or indirectly at least 5% of the company paying the dividend, credit shall take into account the underlying tax paid by the Egyptian company out of which dividend was paid.

In case of exit from the Egyptian investment, gains arising on the disposal of the shares by the Mauritius Company will be taxable only in Mauritius by virtue of the DTAA. In Mauritius there is no capital gains tax.

The other salient features of the DTAA are as follows:

Income Withholding tax rate (WHT) under DTAA Source taxation in Mauritius Source taxation in Egypt
Dividend 5% / 10% (1) Nil Nil
Interest 10% 10% (2) 20%
Royalties 12% 10% / 15% (3) 20%
Capital Gains in case of disposal of shares Taxed only in the resident state Nil Nil

 


(1) 5% on gross dividend applies if beneficial owner holds at least 25% and
10% on gross dividend 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) 10% on payments to resident/ 15% on payments to non-residents/ No WHT where payment is being made
from a Global Business Company.


Discover more: Mauritius ratifies DTAA with Egypt


Your Taxand contacts for further queries are:
Gary Gowrea
T. +230 405 7305
E. gary.gowrea@cim.mu

Ryan Allas
T. +230 405 7305
E. ryan.allas@cim.mu

 

Taxand's Take

Multinationals looking to invest into Egypt should investigate the potential advantages of doing so through Mauritius, in a legal and sustainable way. All corporates with operations in either Mauritius and / or Egypt should investigate the DTAA further in order to remain afresh of all tax developments.