Mauritius Enacts a QDMTT From July 1, 2025

General

The Finance Act 2025, enacted on August 8, 2025, introduces a new Sub-Part AF to the Income Tax Act to include a domestic minimum top-up tax (intended to be a QDMTT) from July 1, 2025.

The Income Inclusion Rule (IIR) and Under-Taxed Profits Rule (UTPR) are not included.

The Finance Act, 2025 provides for a high-level introduction of a QDMTT. As such it includes the key provisions of the OECD Model Rules but the detailed adjustments are not yet provided.

As such, the law provides for:

-Scope of the QDMTT;

-Key definitions from the Model Rules, including consolidated financial statements, excluded entities, government entities, investment entities, permanent establishments ;

-Provisions for mergers/demergers;

-GloBE ETR calculation;

-Administrative provisions.

Key aspects of the Model GloBE Rules are however not included including GloBE income adjustments, definitions for the International Shipping exemption, adjusted Covered Taxes adjustments and the calculation of the Substance-Based Income Exclusion.

Only limited aspects of the OECD Administrative Guidance are included in the law (relating to the QDMTT pushdown adjustments).

QDMTT Design Features

Key design features of the QDMTT include:

Accounting Standard

GloBE income for QDMTT purposes is based on the default GloBE rules. As such the financial accounting net income or loss is the net income or loss determined for an entity, prior to any consolidation adjustments in preparing the consolidated financial statements of the ultimate parent entity. There are no provisions in the law for the use of a local accounting standard.

No Pushdown/PE Adjustments

Tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules must be excluded, as provided in the OECD Administrative Guidance. This is included in Section 50P of the Law.

This preserves Mauritius’s primary right to tax income accruing to a Mauritius member entity which is also a CFC. If there were no statutory derogation from the general GloBE rules for the calculation of the domestic minimum tax, and the CFC tax paid by the controlling company abroad were included in the included taxes of the Mauritius CFC, the effective tax rate would be increased. Therefore, excluding the CFC tax from the Mauritius CFCs covered taxes allows Mauritius to tax low-taxed income at a higher rate than would be the case under an IIR.

Section 50P also prevents the pushdown of tax to hybrids, PEs and for taxes on distributions (aside from Mauritius withholding tax).

Investment Entities

Section 50V of the law applies the QDMTT to investment entities.

Registration

Section 50W(1) of the law provides that in-scope constituent entities is required to notify to the tax authority the designated person resident in Mauritius responsible for filing the QDMTT tax return. This must be provided within 6 months from the end of the fiscal year.

Filing

Section 50W(3) of the law provides that the designated person is required to file the QDMTT tax return not later than 15 months from the end of the fiscal year.

If a designated filing entity is not appointed, each constituent entity is required to file a QDMTT tax return.

Payment

Payment of any QDMTT is required by the deadline for filing the QDMTT return.

Every constituent entity required to file the QDMTT tax return is required to pay the QDMTT based on the following formula:

Total QDMTT amount x (GloBE income of each covered person / Total GloBE income of all covered persons)