The Statement of Practice issued on 25 August 2021 clarifies the tax treatment of trusts and foundations established in Mauritius


The Mauritius Revenue Authority has issued a Statement of Practice (‘SOP’) on 25 August 2021 to clarify the tax treatment of trusts and foundations established in Mauritius after the repeal of Section 46(3) of the Income Tax by the Finance (Miscellaneous Provisions) Act 2021 (‘Finance Act’).

It is important to highlight the following developments pertaining to the tax treatment of Mauritius-based trusts and foundations:

  1. It is a fact that the Finance Act repeals Section 46(3) of the Income Tax Act (‘ITA’), such that trusts and foundations established, from 30 June 2021 onwards, are no longer able to avail from this exemption by filing a declaration of non-residence.
  2. The Finance Act provides a grandfathering provision, such that trusts and foundations set up before 30 June 2021 will still avail of the exemption up to the year of assessment 2024-2025.
  3. The SOP was issued after extensive discussion with industry stakeholders to ensure that the Mauritius trust industry remains competitive.
  4. The SOP clarifies the residency concern for trusts and foundations and restores the tax exemption status in certain circumstances.
  5. According to the SOP, a trust or a foundation, which throughout an income year, has its central management and control outside Mauritius, shall be considered as non-resident and liable to tax only on its chargeable income attributable to its Mauritian source income at a rate specified in the ITA.

The SOP defines central management and control in Mauritius for trust and foundation as follows:


  • The Trust is administered in Mauritius and a majority of the trustees are resident in Mauritius
  • The settlor of the Trust was resident in Mauritius at the time the instrument creating the Trust was executed or at such time as the settlor adds new property to the trust
  • A majority of the beneficiaries or the class of beneficiaries appointed under the terms of the Trust are resident in Mauritius


  • The founder is resident in Mauritius
  • A majority of the beneficiaries appointed under the terms of a charter or will are resident in Mauritius

As such, where the settlor/founder and the majority of the beneficiaries are non-residents, the effect for the trust and foundation will be the same as prior to 30 June 2021, i.e. tax exempt on foreign source income.

Any trust or foundation may claim partial exemption on such categories of income specified in the ITA subject to satisfying the conditions prescribed relating to substance of their activities.

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