Harmful Tax Practices – 2017 Peer Review Reports on the Exchange of Information on Tax Rulings

Mauritius

Mauritius has met all aspects of the terms of reference (ToR) for the calendar year 2017 (year in review) and no recommendations are made.

Mauritius can legally issue three types of rulings within the scope of the transparency framework.

In practice, Mauritius has issued 20 past rulings;1 and for the year in review, Mauritius issued no future rulings within the scope of the transparency framework.

No peer input was received in respect of the exchanges of information on rulings received from Mauritius.

1. Including one that fell into more than one category under the BEPS Action 5 Report.

Introduction

861.  This peer review covers Mauritius’s implementation of the BEPS Action 5 transparency framework for the year 2017. The report has four parts, each relating to a key part of the ToR. Each part is discussed in turn. A summary of recommendations is included at the end of this report.

A. The information gathering process

862.  Mauritius can legally issue the three following types of rulings within the scope of the transparency framework: (i) rulings related to preferential regimes;1 (ii) Cross-border unilateral APAs and any other unilateral tax ruling (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles; and (iii) permanent establishment rulings. Rulings are issued by the Mauritius Revenue Authority (“MRA”). Mauritius publishes taxpayer specific rulings in redacted form.2

Past rulings (ToR I.4.1.1, I.4.1.2, I.4.2.1, I.4.2.2)

863.  For Mauritius, past rulings are any tax rulings within scope that are issued either: (i) on or after 1 January 2015 but before 1 September 2017; or (ii) on or after 1 January 2012 but before 1 January 2015, provided they were still in effect as at 1 January 2015.

864.  Mauritius has a centralised system and all tax rulings issued by the MRA are stored in the taxpayer specific files at the Medium and Small Taxpayers Department (“MSTD”) and maintained by the Secretary of the Tax Ruling Committee (the “Secretary”). The records of the name of the applicant, the date of issuance of the ruling and the date it was gazetted and the reference of the ruling are maintained in an excel spreadsheet. The Secretary is also responsible for uploading the ruling on the MRA website once it is gazetted.

865.  A team comprising the Section Head, a Team Leader, four officers and a support officer in the International Taxation Section (“ITS”) of Large Taxpayers Department (“LTD”) is involved in the implementation of the transparency framework. To identify past rulings, the Secretary filtered the excel spreadsheet for the period defined as “past rulings” and transmitted the list of rulings identified to the Team Leader and Section Head of the ITS.

866.  The Team Leader of ITS allocated past rulings to four officers to identify those rulings that are within the scope of the transparency framework. The officers read and analysed each ruling within a prescribed deadline and the outcome was reported to the Team Leader, Section Head and ultimately the Director of LTD.

867.  In order to identify the potential exchange jurisdictions, all rulings which are in scope were read and analysed by the officers. The information on potential exchange jurisdictions was either available in the ruling itself or where necessary was gathered by using the “best efforts approach”. This involved checking information in the taxpayer specific files. In a few cases where additional information was needed, the MRA requested the information by directly contacting the management company who applied for the ruling on behalf of the taxpayer. Mauritius indicates that this process was done in a co-operative and timely manner. The jurisdictions thus identified were verified by the Team Leader and Section Head of the ITS and then approved by the Director.

Future rulings (ToR I.4.1.1, I.4.1.2, I.4.2.1)

868.  For Mauritius, future rulings are any tax rulings within scope that are issued on or after 1 September 2017.

869.  Mauritius indicates when a future ruling is issued, the Secretary immediately submits the list to the Team Leader and the Section Head of the ITS along with a copy of the selected ruling. The Team Leader then allocates the future ruling to an officer who reads the ruling to identify whether it is in scope of Action 5.

870.  The Team Leader notes the date of allocation and monitors the timeline for future rulings. The support officer is responsible for inputting the details of the ruling which is in scope in the excel file and also provides regular updates to the Team Leader on the approaching deadlines.

871.  In order to identify the potential exchange jurisdictions in the future rulings issued, each officer would read the ruling itself or the taxpayer specific file kept at the MSTD.

872.  In addition, the Director of the LTD has appointed the Secretary to collect all required information on potential exchange jurisdictions when the application for the ruling is being processed and has explained this updated process to all members of the Tax Ruling Committee.

Review and supervision mechanism (ToR I.4.3)

873.  Mauritius notes that the LTD Directorate, which is also the Competent Authority, is in charge of supervising the entire process of identifying relevant rulings and the timely exchange of the information on rulings under the transparency framework. The LTD Director and the MSTD Director agreed on the process for identifying and exchanging past and future rulings in a timely manner.

874.  In addition, the Director of the LTD gave a presentation to the members of the Tax Ruling Committee to brief them on the transparency framework and the information required. Training was also provided to the staff of ITS and the officers in charge of identifying relevant rulings which are in scope of Action 5.

Conclusion on section A

875.  Mauritius has met all of the ToR for the information gathering process and no recommendations are made.

B. The exchange of information

Legal basis for spontaneous exchange of information (ToR II.5.1, II.5.2)

876.  Mauritius has the necessary domestic legal basis to exchange information spontaneously. Mauritius notes that there are no legal or practical impediments that prevent the spontaneous exchange of information on rulings as contemplated in the Action 5 minimum standard.

877.  Mauritius is a party to international agreements permitting spontaneous exchange of information, including (i) the Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (OECD/Council of Europe, 2011) (“the Convention”), (ii) double tax agreements in force with 43 jurisdictions and (iii) ten tax information exchange agreements.3

Completion and exchange of templates (ToR II.5.3, II.5.4, II.5.5, II.5.6, II.5.7)

878.  Mauritius notes that the officer in charge of identifying whether the ruling is in scope of Action 5 also completes the template under Annex C of the 2015 Action 5 Report (OECD, 2015) which is then reviewed by the Team Leader and Section Head of the ITS to ensure completeness and accuracy. The template is then vetted by the Director of LTD (who is also the Competent Authority) before being exchanged.

879.  Mauritius also notes that the FHTP internal suggested guide has been utilised during the process to complete the summary section of the template contained in Annex C of the 2015 Action 5 Report.

880.  To ensure the timely exchange of all past rulings within scope by 31 December 2017, the process involved a regular review by the Team Leader of the pending rulings to be exchanged as prepared by the support officer. The Team Leader also regularly updated the status of the excel workbook which was reviewed by the Section Head.

881.  The same process applies to future rulings. The monitoring process ensures that information on all future rulings is exchanged within three months of the date of issue of the ruling.

882.  For the year in review, the timeliness of exchanges is as follows:

 

Past rulings in the scope of the transparency framework	Number of exchanges transmitted by 31 December 2017	Delayed exchanges
		Number of exchanges not transmitted by 31 December 2017	Reasons for the delays	Any other comments
	26	0	N/A
Future rulings in the scope of the transparency framework	Number of exchanges transmitted within three months of the information becoming available to the competent authority or immediately after legal impediments have been lifted	Delayed exchanges
		Number of exchanges transmitted later than three months of the information on rulings becoming available to the competent authority	Reasons for the delays	Any other comments
	0	0	N/A
Total	26	0

 

Follow up requests received for exchange of the ruling	Number	Average time to provide response	Number of requests not answered
	0	N/A	N/A

Conclusion on section B

883.  Mauritius has the necessary legal basis for spontaneous exchange of information, a process for completing the templates in a timely way and has completed all exchanges on time. Mauritius has met all of the ToR for the exchange of information process and no recommendations are made.

C. Statistics (ToR IV)

884.  The statistics for the year in review are as follows:

 

Category of ruling	Number of exchanges	Jurisdictions exchanged with
Rulings related to preferential regimes	201	Bangladesh, Barbados, France, Germany, Ireland, Jersey, Malta, Mozambique, Qatar, Singapore, South Africa, Thailand, United Kingdom, Zimbabwe
Cross-border unilateral advance pricing arrangements (APAs) and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles	Included in de minimis	N/A
Cross-border rulings providing for a unilateral downward adjustment to the taxpayer’s taxable profits that is not directly reflected in the taxpayer’s financial / commercial accounts	N/A	N/A
Permanent establishment rulings	Included in de minimis	N/A
Related party conduit rulings	N/A	N/A
De minimis rule	6	N/A
IP regimes: total exchanges on taxpayers benefitting from the third category of IP assets, new entrants benefitting from grandfathered IP regimes; and taxpayers making use of the option to treat the nexus ratio as a rebuttable presumption	N/A	N/A
Total	26

1. One of the rulings related to preferential regimes also relates to APA.

D. Matters related to intellectual property regimes (ToR I.4.1.3)

885.  Mauritius offers two preferential regimes, which also offer benefits to income from intellectual property (“IP regime”).4 However for the year in review no transparency requirements under the Action 5 Report (OECD, 2015) were relevant, as follows:

• New entrants benefitting from the grandfathered IP regime: not applicable for the year in review, because Mauritius is currently in the process of amending the two regimes and has not taken a decision yet on whether it will provide grandfathering to existing taxpayers. Should Mauritius provide grandfathering to taxpayers for which IP income benefits and that entered the regimes after the publication of the 2017 Progress Report (OECD, 2017b), which occurred on 16 October 2017, transparency requirements will apply and this will be taken into account during the 2018 peer review.

• Third category of IP assets: not applicable to these regimes, which in 2017 were in the process of being amended.

• Taxpayers making the use of the option to treat the nexus ratio as a rebuttable presumption: not applicable to these regimes, which in 2017 were in the process of being amended.

Summary of recommendations on implementation of the transparency framework

 

Aspect of implementation of the transparency framework that should be improved	Recommendation for improvement
	No recommendations are made.

References

OECD (2017a), BEPS Action 5 on Harmful Tax Practices – Terms of Reference and Methodology for the Conduct of the Peer Reviews of the Action 5 Transparency Framework, OECD/G20 Base Erosion and Profit Shifting Project, OECD, Paris. www.oecd.org/tax/beps/beps-action-5-harmful-tax-practices-peer-review-transparencyframework.pdf.

OECD (2017b), Harmful Tax Practices - 2017 Progress Report on Preferential Regimes: Inclusive Framework on BEPS: Action 5, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264283954-en.

OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris. https://doi.org/10.1787/9789264241190-en.

OECD/Council of Europe (2011), The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264115606-en.

Notes

← 1.  With respect to the following preferential regimes: 1) Global business license 1, 2) Global business license 2, 3) Global headquarters administration regime, 4) Global treasury activities, 5) Captive insurances, 6) Segment B banking, 7) Investment banking, 8) Freeport zone and 9) Shipping regime.

← 2.  Available at: www.mra.mu/index.php/media-centre/rulings/income-tax-rulings (accessed 19 November 2018).

← 3.  Parties to the Convention are available here: www.oecd.org/tax/exchange-of-tax-information/convention-on-mutual-administrative-assistance-in-tax-matters.htm. Mauritius also has bilateral agreements in force with Australia, Bangladesh, Barbados, Belgium, Botswana, China (People’s Republic of), Congo, Croatia, Cyprus, France, Germany, Guernsey, India, Italy, Kuwait, Latvia, Lesotho, Luxembourg, Madagascar, Malaysia, Malta, Monaco, Mozambique, Namibia, Nepal, Oman, Pakistan, Qatar, Rwanda, Senegal, Seychelles, Singapore, South Africa, Sri Lanka, Swaziland, Sweden, Thailand, Tunisia, Uganda, United Arab Emirates, United Kingdom, Zambia, Zimbabwe and United States.

Note by Turkey: The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey shall preserve its position concerning the “Cyprus issue”.

Note by all the European Union Member States of the OECD and the European Union. The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.

← 4.  These regimes are: 1) Global Business Licence 1 and 2) Global Business Licence 2.