Application of the Core Income Generating Activities Requirement

In 2018, the Income Tax legislation in Mauritius was amended to allow companies to benefit an 80% partial exemption on certain specified types of income they earn, subject to them meeting substance requirements. The said substance requirements varied depending on the type of income and same were detailed in the Income Tax Act and other accompanying regulations.

With the introduction of the partial exemption regime, Section 71(3)(a) of the Financial Services Act (“FSA”), which applies to all Global Business Companies (“GBCs”) regardless of their activity or type of income, was also amended to read as follows:

“A holder of a Global Business Licence shall, at all times –

 carry out its core income generating activities in, or from, Mauritius, as required under the Income Tax Act;

• be managed and controlled from Mauritius; and
• be administered by a management company.”

As the Income Tax Act remains silent on substance requirements which GBCs have to meet with respect to those core income generating activities which do not benefit from the partial exemption regime, an uncertainty was created.

The FSC has now issued its policy stand to help clarify the above.