FSC issues policy stand on the application of the Core Income Generating Activities requirements for Global Business Companies

By March 22, 2022 No Comments
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In a correspondence dated 17 January 2022, the Financial Services Commission (FSC) confirmed that, effective 1 January 2022, only holders
of / applicants for a Global Business Licence (GBL) wishing to avail of a preferential tax advantage should demonstrate that their Core Income
Generating Activities (CIGA) are / will be carried out, in or from Mauritius at all times.

Therefore, only Global Business Companies (GBCs) wishing to benefit from the Partial Exemption Regime (PER) which entitles them to anexemption of 80% on certain streams of income such as interest received by GBCs or the income derived by GBCs on certain activities whichare licensed and regulated by the FSC etc.1, are required to demonstrate their CIGA in Mauritius.

This is a welcomed development for the global business industry and a relief for GBCs for which preferential tax advantages are not available or applicable. Previously, there was uncertainty on whether meeting the CIGA requirements was a condition attached to the licence of GBCs or if this was part of the substance requirements only for GBCs wishing to avail of preferential tax advantages.
It is noteworthy to mention that all GBCs can still claim tax credit in Mauritius for any tax suffered on foreign sourced income as an alternative to claiming benefit under the PER.

Regardless of the above, the FSC and the tax authorities will still require GBCs to be managed and controlled in Mauritius to ascertain their tax residence, which will then enable them to take advantage of the various tax treaty benefits that are available to tax resident vehicles. To access the correspondence dated 17 January 2022 issued by the FSC.

How can ITL help?

Our specialized tax team will be able to provide guidance on the applicability of the available preferential tax advantages to GBCs whilst identifying and advising on any gaps in relation to economic substance. We can also assist our clients in the implementation of their CIGA requirements through the provision of serviced office space and the fulfilment of their direct and/or indirect employment endeavours.