Global Business Licence company (GBC) is a tax resident company and is required to be centrally managed and controlled in Mauritius. In addition, GBCs are subject to the requirements of the Core Income Generating Activities (CIGA), as provided under section 71(3)(a)(i) of the Financial Services Act (FSA).
However, since the CIGA requirements came in force, there was uncertainty as to whether meeting the CIGA requirements was a condition attached to the Global Business Licence (GBL) of GBCs or whether it was part of the substance requirements only for GBCs wishing to avail of preferential tax advantages.
The Financial Services Commission (FSC) in its correspondence dated 17 January 2022 addressed to Management Companies confirmed that, effective 1 January 2022, only holders of or applicants for a GBL that benefit or would like to benefit from a preferential tax advantage should demonstrate that at all times their CIGA are or would be carried out, in or from Mauritius.
Therefore, only GBCs claiming or wishing to claim a preferential tax advantage, e.g., benefit from the Partial Exemption Regime (PER) which entitles them to an exemption of 80% on certain streams of income such as interest, etc. are required to demonstrate their CIGA in Mauritius.
This correspondence from the regulatory authority is a welcomed development for the global business industry by removing the uncertainty and a relief for GBCs for which preferential tax advantages are not available or applicable.
It should also be noted that GBCs can still claim foreign tax credit in Mauritius for any tax suffered on foreign sourced income as an alternative to claiming benefit under the PER.