Corporate Tax Comparative Guide

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1 Basic framework

1.1 Is there a single tax regime or is the regime multi-level (eg, federal, state, city)?

All taxes in Mauritius are administered under a unified tax system at the national level by the Mauritius Revenue Authority (MRA). There are no separate federal or state tax regimes.

1.2 What taxes (and rates) apply to corporate entities which are tax resident in your jurisdiction?

Corporate tax: Companies which are resident in Mauritius are subject to corporate income tax on their worldwide chargeable income at a rate of 15%. This is subject to any applicable exemption on certain types of income or activity or any credit that can be claimed in respect of foreign tax suffered on income, subject to meeting specific requirements.

Trust and foundations (other than charitable entities) are treated as companies for tax purposes in Mauritius.

In addition to the income tax on their chargeable income, companies may also be subject to the following taxes.

Corporate climate responsibility levy: As from 1 July 2024, companies with a turnover above MUR 50 million are subject to a 2% corporate climate responsibility levy on their chargeable income.

Corporate social responsibility (CSR) fund: Companies are required, in every year, to set up a CSR fund equivalent to 2% of their chargeable income in the preceding year. For CSR funds set up on or after 1 January 2019, 75% of the fund must be remitted to the director general of the MRA. For CSR funds set up prior to this, at least 50% should be remitted.

Qualified domestic minimum top-up tax (QDMTT): Mauritius-resident companies that are part of a multinational enterprise group with annual consolidated global revenue exceeding €750 million will now be subject to the QDMTT, ensuring that a minimum tax is paid in Mauritius, aligned with the Organisation for Economic Co-operation and Development's Pillar Two Framework.

The QDMTT ensures a minimum effective tax rate of 15% on income earned by covered entities. If the actual tax paid is below this threshold, a top-up tax is imposed. Covered persons exclude certain entities such as:

• government bodies;
• pension funds; and
• investment funds.

We are currently awaiting the detailed regulations to confirm the precise scope of application of the QDMTT.

Fair share contribution: As from the year starting 1 July 2025, companies that have a chargeable income exceeding MUR 24 million must contribute to the newly introduced fair share contribution. However, this contribution will not apply to:

• companies holding a global business licence (GBCs); or
• companies benefiting from tax holidays.

Banks will be required to contribute to an additional 2.5% on their chargeable income derived from domestic operations only.

Value-added tax (VAT): A standard VAT rate of 15% is applicable to goods and services supplied in Mauritius. Certain goods and services are zero rated and some are treated as exempt supplies for VAT purposes.

As from 1 January 2026, the standard VAT rate will be applicable to all companies whose annual turnover of taxable supplies exceeds MUR 3 million.

1.3 Is taxation based on revenue, profits, specific trade income, deemed profits or some other tax base?

Taxation of corporate entities in Mauritius is levied on chargeable income, which is simply defined as 'net income' – that is, the aggregate amount remaining after allowable deductions from the gross income. 'Gross income' refers to total income derived by such corporate entities but excludes exempt income.

An alternative minimum tax (AMT) will, as from the tax year starting 1 July 2026, be imposed on the following companies:

• hotels;
• insurance companies;
• companies engaged in financial intermediation activities;
• companies engaged in real estate activities; and
• telecommunications companies.

In the case of a company, where the normal tax payable for an income year is less than 10% of its adjusted book profit, the tax payable will be deemed to be 10% of the adjusted book profit for that income year.

The AMT will not apply to:

• GBCs; or
• companies that:
• • are exempt from income tax payments; or
  • have been granted tax holidays.

1.4 Is there a different treatment based on the nature of the taxable income (eg, gains on assets as opposed to trading income or dividend income)?

Yes. The tax treatment of income in Mauritius may vary depending on the nature of income, with specific exemptions and deductions available for certain income streams. The most common types of income are discussed below.

Capital gains: Capital gains are not taxable in Mauritius.

Dividends: Dividends received locally by resident companies are generally tax exempt.

Foreign dividends received by a company in Mauritius are generally taxable at the rate of 15%. However, taxpayers may claim:

• a tax credit for any withholding tax and underlying tax suffered abroad on the profits out of which dividends are paid out; or
• the 80% exemption on foreign source dividends, subject to satisfaction of the prescribed substance requirements.

Interest income: Subject to applicable conditions, interest income may also qualify for partial exemption.

In addition, interest paid by a resident company to non-residents will generally be subject to withholding tax, subject to any tax treaty provision.

1.5 Is the regime a worldwide or territorial regime, or a mixture?

Mauritius applies a worldwide tax system with certain nuances; resident individuals and entities are subject to Mauritian income tax on their worldwide income from all sources. However, income derived from outside Mauritius is taxable only if it is remitted to Mauritius.

A non-resident entity will only be subject to income tax on income, other than exempt income, derived from Mauritius.

1.6 Can losses be utilised and/or carried forward for tax purposes, and must these all be intra-jurisdiction (ie, foreign losses cannot be utilised domestically and vice versa)?

If a company is unable to fully offset its tax losses in a given year, it may, subject to prescribed conditions, carry forward the unutilised portion and apply it against its net income in the subsequent five income years.

The time limit of five income years does not apply for the carrying forward of any amount of loss attributable to:

• annual allowance claimed in respect of capital expenditure incurred on or after 1 July 2006; or
• a deduction claimed in relation to expenditure incurred on deep ocean water air conditioning or water desalination plant or qualifying expenditure (where research and development is carried out in Mauritius) pursuant to sections 64, 65 and 161A (55) of the Income Tax Act 1995.

The carry forward of loss is not applicable where there has been a change in shareholding of more than 50% in the company. If there is a change in ownership falling below this threshold, the right to carry forward the losses may be disallowed by the director-general.

Foreign-source losses are generally not deductible against Mauritius-source income.

1.7 Is there a concept of beneficial ownership of taxable income or is it only the named or legal owner of the income that is taxed?

The legal owner of the income is generally taxed unless anti-avoidance rules apply. Companies must keep up-to-date records of the identity of all beneficial owners.

The concept of beneficial ownership may be relevant in the context of double taxation avoidance agreements to determine treaty benefits.

1.8 Do the rates change depending on the income or balance-sheet size of the taxpayer?

Mauritius applies a flat rate of 15% for corporate income tax. The Income Tax Act 1995 (ITA) does not typically apply variable rates based directly on balance sheet size. Certain rates, such as the newly introduced AMT and the special levy on banks, are based on book profit. The newly introduced corporate climate responsibility levy also applies to companies whose turnover exceed a certain threshold.

The ITA, however, does provide for exemptions on certain specified incomes or sectors, such as:

• companies engaged in the export of goods;
• innovation-driven activities; and
• regulated global businesses activities such as close-ended funds, which may reduce the effective tax rates.

Banks in Mauritius are also subject to a two-tiered tax rate:

• 5% on the first MUR 1.5 billion; and
• 15% on the remainder.

1.9 Are entities other than companies subject to corporate taxes (eg, partnerships or trusts)?

Trust and foundations (other than charitable entities) are treated as companies for tax purposes in Mauritius.

Partnerships are tax transparent and income is thus taxed in the hands of the partners. Limited partnerships are equally tax transparent unless elected to be taxed as separate entity.

2 Special regimes

2.1 What special regimes exist (eg, for fund entities, enterprise zones, free trade zones, investment in particular sectors such as oil and gas or other natural resources, shipping, insurance, securitisation, real estate or intellectual property)?

There are industry-specific incentives which are designed either to support local businesses or to attract foreign investment.

Partial exemption regime: A partial exemption regime amounting to 80% of the chargeable income is available to certain streams of income (eg, dividends, certain types of interest and aircraft, rail and ship leasing income) and holders of certain licences (eg, collective investment scheme (CIS), closed-end fund (CEF), CIS manager, investment adviser, investment dealer), subject to the fulfilment of certain substance requirements which broadly relate to conditions such as:

• employment and expenditure in Mauritius; and
• the carrying out of core income-generating activities in Mauritius.

The exemption rate on interest income derived by CISs and CEFs is 95%. Both domestic companies and global business companies are eligible for the partial exemption.

Technology-driven incentives: Companies holding a payment intermediary services licence or a robotic and AI-enabled advisory services licence issued by the Financial Services Commission can benefit from an 80% exemption on their income, subject to satisfying certain substance conditions.

As from July 2024, profits generated from the trading of virtual assets and virtual tokens are exempt from income tax.

Chargeable income derived by manufacturing companies engaged in the medical, biotechnology or pharmaceutical sector and holding an investment certificate (aside from income derived from IP assets) is subject to a reduced tax rate of 3%, subject to certain conditions.

Companies involved in innovation-driven activities in respect of IP assets which are developed in Mauritius benefit from an exemption for a period of eight years, starting from the income year in which the company commenced its innovation-driven activities, provided that they satisfy the substance requirements.

Freeport and export of goods: Companies engaged in the export of goods are subject to a lower corporate tax rate at 3% on chargeable income attributable to exports. Similarly, the income of a freeport operator or private freeport developer engaged in manufacturing activities in a freeport zone will be taxable at 3%, provided that it satisfies the substance requirements relating to minimum employment and expenditure.

Other tax holidays: Tax holidays of up to 10 years are available for those carrying out certain activities, subject to certain substance criteria. These include tax holidays for:

• food processing activities by a company holding a registration certificate; and
• income derived from activities of:
• • holders of a global headquarters administration licence;
  • companies undertaking global treasury activities; and
  • global legal advisory services, overseas family office and asset management licence holders.

2.2 Is relief available for corporate reorganisations or intra-group transfers of companies and other assets? Please include details of any participation regime.

There is no formal group taxation relief. However certain provisions and exemptions may apply depending on the nature of the transaction and the entities involved. For instance, any gains arising from the transfer of shares during the reorganisation will not be taxable. Furthermore, subject to the shareholding of a company not changing for more than 50%, the losses may be carried forward for up to five years.

2.3 Can a taxpayer elect for alternative taxation regimes (eg, different ways to calculate the taxable base, such as revenue-based versus profits based or cash basis versus accounts basis)?

A small enterprise may apply to the director-general of the Mauritius Revenue Authority (MRA) for the net income of its business to be computed on a cash basis instead of an accrual basis.

A 'small enterprise' in this respect refers to an entity that has an annual turnover not exceeding MUR 10 million but does not include a global business corporation (GBC).

2.4 What are the rules for taxing corporates with different functional or reporting currency from that of the jurisdiction in which they are resident?

Income, expenses and losses are generally expressed in Mauritian rupees. However, GBCs and such companies as are approved by the registrar of companies may:

• prepare their financial statements in any other MRA-approved foreign currency; and
• submit the advance payment statement and return of income, and pay any tax, in the chosen foreign currency.

2.5 How are intangibles taxed?

Income derived from intangibles is typically taxed at the standard rate; however, certain assets may benefit from tax incentives.

Refer to question 2.1. Companies involved in innovation-driven activities in respect of IP assets which are developed in Mauritius are eligible for a tax holiday of eight years, subject to certain conditions.

Capital expenditure incurred on intangible assets may equally be eligible for annual allowances depending on the asset type.

2.6 Are corporate-level deductions available for contributions to pensions?

Pension contribution made by an employer on behalf of employees may be deducted from the company's gross income.

2.7 Are taxpayers from different sectors (eg, banking) subject to different or additional taxes or surtaxes?

Please see the discussion on alternative minimum tax and fair share contribution in questions 1.2 and 2.1.

2.8 Are there other surtaxes (eg, solidarity surtax, education tax, corporate net wealth tax, remittance tax)?

Refer to question 1.3. for details of the following:

• qualified domestic minimum top-up tax;
• fair share contribution;
• alternative minimum tax; and
• corporate climate responsibility levy.

Banks are also subject to a special levy of 5.5% on their leviable income.

Operators of telephony services are also liable to a solidarity levy of 5 % of the accounting profit and 1% of their turnover.

2.9 Are there any deemed deductions against corporate tax for equity?

There are no specific provisions in relation to deemed deductions.

The Mauritius Revenue Authority has, however, clarified, in respect of expenses incurred in the production of income, that distributions from preference shares may be treated as interest (instead of dividends) and will hence be deductible for income tax purposes.

3 Investment in capital assets

3.1 How is investment in capital assets treated – does tax treatment follow the accounts (eg, depreciation) or are there specific rules about the write-off for tax purposes of investment in capital assets?

The Income Tax Act 1995 (ITA) permits taxpayers to deduct, via annual allowances, qualifying capital expenditure on specified assets (eg, offices, showrooms, industrial premises or machinery) at prescribed rates, irrespective of whether those assets are depreciated for accounting purposes.

3.2 Are there research and development credits or other tax incentives for investment?

A company investing or spending on innovation, improvement or development of a process, product or service will be eligible for accelerated depreciation of 50% in respect of capital expenditure incurred on research and development (R&D) and a double deduction in respect of certain qualifying expenditure on R&D directly related to the entity's trade or business (eg, medical research and development), provided that the R&D is carried out in Mauritius.

Tax incentives also vary depending on the sector. Refer to question 2.1. For instance, for companies involved in innovation-driven activities in respect of IP assets which are developed in Mauritius, the exemption is for a period of eight years, starting from the income year in which the company commenced its innovation-driven activities, provided that the company satisfies the substance requirements.

The purchase or lease and installation of specialised software and systems are also deductible for income tax purposes.

3.3 Are inventories subject to special tax or valuation rules?

Under the Income Tax Regulations, the value of trading stock to be considered will be determined in accordance with International Accounting Standard 2 on Inventories. The 'last in, first out' formula is not used to assign costs to stocks and work in progress.

3.4 Are derivatives subject to any specific tax rules?

Derivatives, considered as securities, are not subject to specific tax rules and are not subject to capital gains tax.

4 Cross-border treatment

4.1 On what basis are non-resident corporate entities subject to tax in your jurisdiction?

A non-resident entity will only be subject to income tax on income, other than exempt income, derived from Mauritius.

4.2 What withholding or excise taxes apply to payments by corporate taxpayers to non-residents?

Withholding taxes apply to payments made by resident corporate taxpayers (other than global business corporation (GBCs)) to non-residents. Some of the applicable rates are as follows, although these may vary subject to tax treaty provisions:

• Royalty income: 15%
• Rental income: 10%
• Commission: 3%
• Interest payable by entities other than banks: 15%
• Service provider fees for services rendered in Mauritius: 5%

The following are not subject to withholding tax in Mauritius:

• dividends paid by a Mauritian resident company; and
• payments made by GBCs to non-residents not carrying out any business in Mauritius out of their foreign-source income.

4.3 Do double or multilateral tax treaties override domestic tax treatments?

Tax treaties may override conflicting domestic provisions where such tax treaties allow for a lower tax rate or exemption over the domestic treatment, unless a specific overriding provision is legislated locally and is mutually accepted by both countries.

4.4 In the absence of treaties, is there unilateral relief or credits for foreign taxes?

Under domestic law, resident companies may claim foreign tax credits or benefit from the partial exemption regime, subject to providing written proof of taxes paid abroad or meeting substance requirements respectively.

Please refer to question 2.1.

4.5 Do inbound corporate entities obtain a step-up in asset basis for tax purposes?

There is generally no step-up provision which would allow the adjustment of assets to fair market value. There are, however, specific rules concerning the valuation of trading stock. Annual allowances may be claimed.

4.6 Are there exit taxes (for disposed-of assets or companies changing residence)?

There is no exit tax in Mauritius. Gains from the disposal of shares are also exempt from tax.

5 Anti-avoidance

5.1 Are there anti-avoidance rules applicable to corporate taxpayers – if so, are these case law (jurisprudence) or statutory, or both?

The Income Tax Act 1995 (ITA) provides for a general anti-avoidance provision (GAAR) which seeks to prevent transactions whose sole or dominant purpose is to obtain a tax benefit, having regard to several factors, including:

• the manner in which the transaction was entered into or carried out; and
• the form and substance of the transaction.

A 'tax benefit' is defined as the avoidance or postponement of the liability to pay income tax or the reduction in the amount thereof.

The ITA also contains the following specific anti-avoidance provisions:

• application of the arm's-length test;
• interest on debentures issued by reference to shares;
• excessive remuneration or share of profits;
• excessive remuneration of shareholders or directors;
• benefits to shareholders;
• excessive management expenses;
• leases for other than adequate rent; and
• rights over income retained.

There are very few judgments at the Supreme Court level on the GAAR. In recent years, the provision has been raised by the tax authorities and it is increasingly being litigated at the level of the Assessment Review Committee and in the Mauritian courts.

No known criminal tax cases pertaining to any GAAR provisions in Mauritius exist. However, the Mauritius Revenue Authority (MRA) has issued assessments pursuant to arm's-length and other tax avoidance provisions in a number of civil tax cases. Criminal procedure is rarely invoked, even in cases of tax avoidance.

5.2 What are the main 'general purpose' anti-avoidance rules or regimes, based on either statute or cases?

Refer to question 5.1. The GAAR provisions seek to prevent transactions whose sole or dominant purpose is to obtain a tax benefit, having regard to seven factors, including:

• the manner in which the transaction was entered into or carried out; and
• the form and substance of the transaction.

5.3 What are the major anti-avoidance tax rules (eg, controlled foreign companies, transfer pricing (including thin capitalisation), anti-hybrid rules, limitations on losses or interest deductions)?

Controlled foreign companies (CFCs): Where a Mauritius tax-resident company carries on business through a CFC and the MRA considers that the non-distributed income of the CFC arises from non-genuine arrangements which have been put in place for the essential purpose of obtaining a tax benefit, that income will be deemed to form part of the chargeable income of the resident company.

The CFC rule will not apply to a CFC where, in an income year:

• accounting profits are not more than €750,000 and non-trading income is not more than €75,000;
• accounting profits amount to less than 10% of its operating costs for the tax period; or
• the tax rate in the country of residence of the CFC is more than 50% of the tax rate in Mauritius.

Transfer pricing: Mauritius does not yet have transfer pricing regulations. However, the ITA provides that the MRA can reassess the tax liability of a party where a transaction has created rights or obligations that would not normally be created between persons dealing at arm's length. The current wording of provisions of the law does not limit its application to related-party transactions.

While Mauritius does not have thin capitalisation rules, the ITA provides that if a company has issued debentures to its shareholders, any interest paid on debentures and claimed as a deductible expense may be disallowed and treated as a dividend. In addition, deductions of interest may be disallowed by the MRA where the interest:

• is payable to a non-resident who is not chargeable to tax on the amount of the interest; or
• is not likely to be paid in cash within a reasonable time.

Interest deductions: The director general of the MRA retains the discretion to disallow any deduction on expenditure incurred as interest where it is satisfied that:

• the interest is payable to a non-resident which is not chargeable to tax on the amount of the interest; or
• the interest is unlikely to be paid in cash within a reasonable time.

For limitations on losses, please refer to question 1.6.

5.4 Is a ruling process available for specific corporate tax issues or desired domestic or cross-border tax treatments?

A taxpayer deriving income or taxable supplies may apply to the director general of the MRA to make a ruling on a tax issue under the ITA or the Value Added Tax Act. The director general will provide a ruling within 30 days of receipt of an application. In practice, this timeline is rarely respected, as the MRA frequently has requests for clarification or requires additional documentation in order to consider the application for rulings. A ruling is binding on the MRA, except where there is a material difference between the facts relating to the transaction and the details contained in the application.

5.5 Is there a transfer pricing regime?

No. Refer to question 5.3.

5.6 Are there statutory limitation periods?

Following recent amendments in law, the MRA will be able to raise assessments with regard to a period not beyond two years of assessment preceding the year in which a return is made (in effect, three years), save for exceptional circumstances such as fraud or where tax returns have not been submitted.

6 Compliance

6.1 What are the deadlines for filing company tax returns and paying the relevant tax?

Companies must file their annual tax returns within six months of the end of their financial year and any tax due must be paid at the time of filing the return.

6.2 What penalties exist for non-compliance, at corporate and executive level?

Penalties apply for late filing and a penalty of 5% is applicable for the late payment of tax due. The penalties are payable by the company and do not, at first, target the company's board or agent. However, directors or agents may be held personally liable for unpaid tax in case of:

• fraud;
• wilful misrepresentations; or
• failure to comply with statutory obligations.

6.3 Is there a regime for reporting information at an international or other supranational level (eg, country-by-country reporting)?

Mauritius signed the Convention on Mutual Administrative Assistance in Tax Matters developed by the Organisation for Economic Co-operation and Development and started to exchange information under the Common Reporting Standard (CRS) as from 2018. Under the CRS, the Mauritius Revenue Authority (MRA):

• receives, from relevant financial institutions based in Mauritius with respect to financial accounts held by non-residents, the information required to be disclosed; and
• transmits that information to the relevant tax authorities.

It is the responsibility of each financial institution to decide whether it must:

• register with the MRA in respect of the CRS; and
• provide the correct information in the required format to the MRA for exchange with foreign tax authorities.

The MRA monitors compliance by financial institutions with domestic legal requirements and, as necessary, will enforce the provisions of the ITA.

Mauritius has also signed the Model 1 Inter-Governmental Agreement with the United States. Financial institutions in Mauritius must report accounts held by US persons to the MRA, which then transmits the data to the Internal Revenue Service.

Mauritius has also implemented country-by-country reporting with respect to companies to which the reporting rules apply.

7 Consolidation

7.1 Is tax consolidation permitted, on either a tax liability or payment basis, or both?

There is no tax consolidation in Mauritius for groups, except for permanent establishments being consolidated at the head office level. There are no group taxation provisions in Mauritius tax law, other than the transfer of losses by the following upon their takeover:

• tax incentive companies;
• sugar factory operators;
• subsidiaries located in the Island of Rodrigues; and
• manufacturing companies.

8 Indirect taxes

8.1 What indirect taxes (eg, goods or service tax, consumption tax, broadcasting tax, value added tax, excise tax) could a corporate taxpayer be exposed to?

A corporate taxpayer will be subject to value-added tax (VAT) on goods and services (including zero-rated and exempt supplies). The corporate taxpayer may be required to register for VAT where its turnover exceeds the threshold of MUR 3 million.

Custom duties are levied on imported goods, with varying rates depending on the commodity and its classification.

Companies (other than global business corporations (GBCs)) must allocate 2% of their chargeable income to corporate social responsibility projects.

An environmental protection fee is levied:

• on the turnover of designated premises such as hotels and tourist residences; and
• where activities such as stone-crushing and the manufacture or processing of aggregates, concrete blocks and precast units are carried out.

8.2 Are transfer or other taxes due in relation to the transfer of interests in corporate entities?

There is no capital gains tax in Mauritius. As such, gains from the sale of shares or interests in a corporate entity are not taxable (subject to the transaction not being deemed a gain obtained as ordinary business income).

Where the corporate entity being transferred holds immovable property in Mauritius, the transfer of shares may attract registration duty and land transfer tax. These are calculated proportionally to the value of the underlying immovable property.

Listed shares are, however, exempt from registration duty. GBCs are also exempt from registration duties on share transfers.

9 Trends and predictions

9.1 How would you describe the current tax landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The tax environment in Mauritius is increasingly dynamic, shaped by:

• evolving enforcement strategies;
• dispute resolution reforms; and
• judicial precedents emphasising clarity and substance.

Mauritius follows a self-assessment system whereby the taxpayer makes a self-assessment of its tax liability when filing its annual tax returns. With the advent of the recently introduced fair share contribution, alternative minimum tax and qualified domestic minimum top-up tax, the tax landscape continues to give rise to challenges in relation to:

• the filing of returns;
• the interpretation of legislation; and
• the application of the law.

It is also proposed that the Assessment Review Committee be replaced by the Revenue Tribunal due to the increasing complexity of tax cases. The Revenue Tribunal Act is due to be promulgated shortly and will confer additional powers such as the summoning of witnesses similar to court proceedings.

10 Tips and traps

10.1 What are your top tips for navigating the tax regime and what potential sticking points would you highlight?

In respect of cross-border transactions and concerning the global business industry (ie, structures that undertake outbound investment), it is highly recommended that taxpayers seek tax advice – particularly regarding whether substance requirements are met. The partial exemption regime has triggered a fair amount of tax controversy, so taxpayers should ensure that the structures put in place are robust and can withstand the scrutiny of the Mauritius Revenue Authority (MRA).

Tax disputes can be mitigated by:

• having the proper documentation to support tax filings (eg, invoices; contractual agreements; transfer pricing documentation if appropriate; legal or tax opinions);
• applying for rulings from the MRA in respect of issues where the law is unclear or in areas of potential controversy – rulings are binding on the MRA and provide the taxpayer with certainty on the particular issue in question;
• indicating an expression of doubt on an income tax return on any point of uncertainty relating to statutory interpretation – this will ensure that no penalty is levied on the taxpayer in respect of any eventual assessment raised on the relevant point. Once an assessment is raised, there are ways to mitigate the amount of tax assessed by seeking advice and support from a tax adviser and/or tax counsel on any grey areas or tricky issues in relation to any point of law. It is also crucial not to ignore any requests for information. If appropriate, the taxpayer should request extensions to respond to requests for information; and
• establishing a clear, cooperative and continuous line of communication with the MRA auditor.

The MRA is increasingly applying targeted anti-avoidance provisions (eg, Section 75 of the ITA – namely, the arm's-length provision) and general anti-avoidance provisions (Section 90 of the Income Tax Act) in relation to arrangements such as interest-free loans and other intra-group arrangements. It is wise to seek legal advice as early as possible.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.