ARTICLE · 19 OCTOBER 2021

Important Changes To The Residency Of Mauritian Trusts

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The Mauritius Finance Act 2021, which was gazetted on 5 August to implement measures announced in the 2021 Budget Speech, has introduced a significant change to Mauritian trusts in respect of residency.

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The Mauritius Finance Act 2021, which was gazetted on 5 August to implement measures announced in the 2021 Budget Speech, has introduced a significant change to Mauritian trusts in respect of residency. This will apply to all trusts settled after 30 June 2021.

Previously, where the settlor and none of the beneficiaries were ordinarily resident in Mauritius during a tax year, a Mauritian trust was permitted to file a 'Declaration of Non-Residence' to the Mauritius Revenue Authority (MRA). This meant that all earnings of the trust were tax exempt in Mauritius, and it would not be required to file a tax return.

The Finance Act 2021 has changed this position. Non-resident trusts are no longer able to file a 'Declaration of Non-Residence' and benefit from a tax exemption. They will instead be subject to income tax of 15%, but with partial exemption on applicable income as follows:

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