Mauritius is a late adopter to the Common Reporting Standard (“CRS”). CRS evolved out of an OECD-led initiative currently supported by over 100 countries (“Participating Countries”). The purpose of CRS is to combat tax evasion. Participating Countries do this by the exchange of their tax residents’ tax information. Late adopter countries are required to exchange tax information by no later than 31 July 2018.
CRS applies to Mauritius financial institutions, these include management companies, banks, investment companies, trusts and foundations. CRS applies to companies which are incorporated in Mauritius or have their central management and control in Mauritius. Trusts will fall under CRS if the trust is administered in Mauritius and the majority of the trustees are resident in Mauritius or where the settlor of the trust was resident in Mauritius at the time the trust was settled.
Does CRS affect you?
If you are an individual and you are tax resident in a Participating Country, for example, South Africa, and you hold a financial account with a financial institution in Mauritius, the latter will exchange your tax information with such Participating Country. Being a tax resident of more than one Participating Country will likely lead to multi-jurisdictional reporting of the same account information. It is important to note that CRS does not give rise to a tax liability in respect of a reportable person.
The definition of a “financial account” has a wide scope and encompasses not only depository and custodial accounts, but also equity and debt interests held in investment entities. These include not only shareholdings or units in collective investment schemes, but also equity interests in a trust, or similar legal arrangement.
Tax laws and the laws governing CRS are not straightforward. We strongly recommend that you consult a tax or legal advisor to make sure that you comply with the applicable tax laws and reporting obligations. Whilst Osiris is unable to provide you with tax or legal advice, we have established a network of expert and experienced tax and legal professionals who are available to assist our clients.