Mauritius compliant with EU Tax Good Governance Principles
Tri-Pro Administrators Ltd wishes to inform its stakeholders that, on 10 October 2019, the Economic and Financial Affairs Council of the European Union (“ECOFIN”) have found Mauritius to be compliant with all commitments on tax cooperation. It is further reported that Mauritius has implemented ahead of schedule all necessary reforms to comply with EU tax good governance principles.
Mauritius adopted on 25 July 2019 its Finance Bill 2019 and on 16 August 2019 additional regulations that amended the legislation applicable to its Freeport zone and Partial Exemption regimes.
The EU Code of Conduct Group (“COCG”) at its meeting of 13 September 2019 examined these amendments and concluded that Mauritius had met its commitments to address the deficiencies identified in the above mentioned two regimes. The Freeport regime is no longer preferential, substance requirements have been introduced in both regimes and the issue of lack of anti-abuse rules has been addressed by the introduction of CFC rules broadly aligned with those of EU’s anti-tax avoidance directive.
As a result, the COCG has concluded that Mauritius should hence be removed from section of Annex II of EU list of non-cooperative jurisdictions for tax purposes (the ‘grey list’).
It should be noted that in December 2017, ECOFIN had set up a black list and a grey list of tax havens. Whilst United Arab Emirates and the Marshall Islands shall be removed from the list of non-cooperative jurisdictions for tax purposes, ECOFIN stated that Albania, Costa Rica, Switzerland and Mauritius are compliant with all commitments on tax cooperation and no longer ‘grey listed’.