OECD Latest Report on Peer Review Results on Preferential Regimes: Mauritius tax regimes not harmful19 Nov 2018
In October 2017, Mauritius, together with 52 worldwide jurisdictions, underwent a peer review assessment from the Organisation for Economic Co-operation and Development (OECD)'s Forum on Harmful Tax Practices. Following this review and changes brought about by the government of Mauritius, it has been established that Mauritius does not have any harmful tax regimes as confirmed by the OECD report.
Why was Mauritius reviewed?
The review is part of the OECD's Base Erosion and Profit Shifting (BEPS) Action 5, which is one of the four BEPS minimum standards that all Inclusive Framework members have committed to implement. As stated by the OECD, 'Action 5's minimum standard relates to preferential tax regimes where a peer review is undertaken to identify features of such regimes that can facilitate base erosion and profit shifting, and therefore have the potential to unfairly impact the tax base of other jurisdictions.'
On 15th November 2018, the OECD released its report on Peer Review Results in its assessment of harmful tax practices of preferential regimes and the report highlights that Mauritius meets all the international requirements of the BEPS Action 5, and thus does not have any harmful practices in its tax regimes.
Commenting on the report, Fazeel Soyfoo, Director of Tax at Ocorian Mauritius said:
“We welcome this announcement which doesn’t come as a surprise, thanks to the reforms made recently. Mauritius hence reaffirms its position as an international financial centre and investment platform of substance, one which is committed to meeting international norms and standards when it comes to matters of taxation.”
You can find a full summary of the update here.
What is BEPS?
As per the OECD:
'BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity. Although some of the schemes used are illegal, most are not. This undermines the fairness and integrity of tax systems because businesses that operate across borders can use BEPS to gain a competitive advantage over enterprises that operate at a domestic level. Moreover, when taxpayers see multinational corporations legally avoiding income tax, it undermines voluntary compliance by all taxpayers.'