Taxes: Working remotely but living in Mauritius for longer than 183

Hi PS1911PS

Welcome to the Mauritius forum 

Not sure about this one, I would suggest that you contact the MRA (Mauritius Revenue Authority) for official infos.

MRA's Service Counter on ground floor, MRA Head Office, Ehram Court, Corner Mgr Gonin & Sir Virgil Naz Streets, Port Louis.

Phone : +230  207 6000

Hopefully someone can further assist.

Regards,
Anoushka

Definitely worth checking this.
I've had friends from the US being double-taxed (at source & locally) in places I've lived before.

PS1911PS wrote:

Hello,

I'm planning on being in Mauritius for greater than 183 days ( At which point I am considered a tax resident). I work for a American company which pays me through my American bank account. Will I get taxed on income if all of my pay goes to my American bank account (considering that I do not have a Mauritian bank account)?

Thanks in advance for the Advice!

Check this:
A person resident in Mauritius is liable to tax on the worldwide income derived by him.

BUT
A resident individual is liable for personal income tax on their world-wide income; however, earned income arising outside Mauritius is taxed only if it is received in Mauritius.

AND
From a personal taxation perspective, you will have to seek the advice of your tax advisor/ accountant in your current country of residence. This is because, if you have been spending a minimum of 183 days or more in Mauritius during a fiscal year, you will be considered as tax resident in Mauritius as per Clause 73 of the Mauritius Income Tax Act.All your income and profits will be generated from outside of Mauritius as per the condition of the Premium Visa and therefore it is very much likely that you will already be paying taxes on those income generated outside of Mauritius in their respective source country. However, once you become tax resident in Mauritius after spending 183 days or more in a fiscal year, you will be liable to taxes in Mauritius on your income generated while in Mauritius, unless there are double taxation avoidance treaties in place between your country of residence and Mauritius, in which case, foreign tax credit can be claimed, if conditions are met.

It is not easy to answer on a forum unless one has experienced it .Thus it will be a good idea to check with the MRA as advised above.

Thanks everyone for the replies. This has shed a lot of light onto the situation. I'm excited to see that there is such a welcoming community here. My mother in law with contact her tax accountant in Mauritius and I will contact mine here. And I'll follow up so we can all have a greater understanding after. Thanks again.

Hello. In your particular situation or any salary earner`s situation with regards to taxation in Mauritius, the Authority looks at where the duties of employment are being performed to determine whether the income is taxable here or not. If the duties are performed in Mauritius, your related earnings are liable to income tax here, whether or not same is being banked overseas.

Now, with regards to the risk of being taxed twice on the same income by two different jurisdictions, there exists Double taxation avoidance agreements between Mauritius and some countries, including US. So, any tax suffered on your earnings in the US can be taken as foreign tax credit (deduction) from your tax payable in Mauritius.

PS1911PS wrote:

Thanks everyone for the replies. This has shed a lot of light onto the situation. I'm excited to see that there is such a welcoming community here. My mother in law with contact her tax accountant in Mauritius and I will contact mine here. And I'll follow up so we can all have a greater understanding after. Thanks again.

BTW and FWIW:
Should you open an account in Mauritius, just be aware of FATCA. More forms to be filled for the IRS !

Thanks Yaya!

Yaya, so since my duties are performed in the US and has nothing to do with Mauritius, and the pay never reaches Mauritius, would it be safe to assume then that it will not be taxed in Mauritius? Because the only time money will come into Mauritius is when I take money out of the ATM or use my American Credit card.

You got it right. Thought your stay in Mauritius relates to the duties of your employment.

Wondering if there are any updates to this thread? We are looking to come to Mauritius for at least a year on Premium Visa with both my wife and I keeping our jobs in Sydney.
Given our income and taxes will be paid in Australia before it hits our bank accounts, I have not found anywhere that confirms if you pay all tax in Australia only, or if you do pay tax in Mauritius (15%) first, and then the remainder in your country of origin.
Ideally want to make this easy for our employers too in that nothing changes from their side from a payment/taxes perspective when we do decide to move.

PS1911PS wrote:

Yaya, so since my duties are performed in the US and has nothing to do with Mauritius, and the pay never reaches Mauritius, would it be safe to assume then that it will not be taxed in Mauritius? Because the only time money will come into Mauritius is when I take money out of the ATM or use my American Credit card.

But surely if you're staying in Mauritius your duties are being performed there unless you fly back the US to perform your work duties?

I'm going to email the MRA and try to get some clarification as I'm in a similar situation.

Realise that you should WANT to pay tax in Mauritius rather than in your country of origin.
The most desirable position to be in is to pay all your tax in Mauritius as it will be at the 15% nominal Mauritian tax rate (for individuals as well as for companies, with zero Capital Gains or Enheritance Tax), which is certainly less than in any other country you are coming from.



To accomplish the above:

1.  you have to stay at least 183 days out of every 365 in Mauritius (and I think there is also a minumum stay period over a 3-year or 5-year cycle)

2.  your country would have to have a non-double taxation agreement with Mauritius (as is the case with the IRS in USA, and with SARS in South Africa for example) to ensure that you pay tax only on one side and not both,

3.  you would have to satisfy any requirements to Emigrate Financially to make it official that you cease paying tax in your country of origin - this has nothing to do with Physical Emigration - most countries incl Mauritius allow you to hold dual citizenship so Financial Emigration does not mean you cut all ties with your country of origin, so you remain a Citizen and thus are able to return at any time in future should you wish to do so. (I know for South Africa the rules pertaining to Financial Emigration from SARS and the Reserve Bank have recently changed as from 1 March 2021).

4.  as also mentioned above, each individual case is different and therefore it is vital to consult a professional tax advisory both in your country of origin (in order to investigate how you can make your Financial Emigration official and end your liability of having to pay tax there); as well as in Mauritius in order to structure your finances in the most efficient manner so as to gain the most benefit from Mauritius' generous tax structure.

For USA there is no taxation agreement with Mauritius but you don't pay double tax.
There is a cap, for 2020 was 107,000, if you lived 330 days out of a year in another country, then up to that amount, you will not pay taxes in the US.
If you earned more than that the IRS considers the amount you pay and you pay the difference...