How Foundations Are Taxed in Mauritius

Foundation taxation in Mauritius is simpler than many families expect, and also stricter than it used to be. A foundation is taxed as a taxpayer in its own right, and a distribution to a beneficiary is then treated under a specific rule. This page sets out the foundation income tax rules, the tax on foundation distributions, and where residence makes a difference. It gives general information only; the outcome for a given family depends on the facts.

The short answer

Under section 49A of the Income Tax Act, every Foundation is taxable on its taxable income at the rate set by Part IV of the First Schedule, which is 15%. Any distribution made to a beneficiary is treated as a dividend.

Two points follow. First, the foundation tax rate is the same standard rate that applies to companies generally (section 44 applies it to any company, subject to the special regimes in sections 44B and 44C). Second, the older exemption for foundations owned entirely by non-residents no longer exists, as explained below.

The figures in this page come from the Income Tax Act as consolidated by the Mauritius Revenue Authority up to the Finance Act 2026.

Why a foundation is a taxpayer

A Foundation acquires legal personality only once it is registered with the Registrar of Companies (also styled Registrar of Foundations) and holds a certificate of registration (section 5 of the Foundations Act 2012). Because it is a separate legal person, it holds assets, earns income and files in its own name, unlike a trust, where the trustee is the legal owner. For the structural background, see what a foundation is in Mauritius and the Foundations Act explained.

A foundation may pursue charitable or non-charitable objects, for the benefit of a person, a class of persons or a specific purpose (sections 3 and 4). Tax follows what the foundation earns, not the label of its purpose, with the charitable exception described later.

The tax at foundation level

Foundation income tax at the Part IV rate

The foundation computes its taxable income and pays tax at 15%. In practice that means the usual questions of any taxpayer: what income arose, what is deductible, and when the return is due. The Act does not give foundations a lower rate of its own.

The standard corporate rate of 15% has applied to tax years starting on or after 1 July 2010. Foundations are caught through section 49A rather than through the company provisions, but they land on the same Part IV rate.

The repealed non-resident exemption

Until 2021, section 49A(2) and (3) exempted a Foundation whose founder and all beneficiaries were non-resident (or holders of a Global Business Licence), provided a declaration of non-residence was filed. The Finance Act 2021 repealed those paragraphs, with deemed effect from 1 July 2021.

This matters because older articles and brochures still describe the exemption as if it were available. It is not in the version of the Income Tax Act consolidated up to the Finance Act 2026. If a source tells you a foundation with only foreign beneficiaries pays no Mauritius tax, treat it as out of date and ask for the current provision.

The same pattern applies to trusts: section 46(3) was repealed in the same way. Section 46(2) still describes a trust with a non-resident settlor and non-resident beneficiaries, but that trust remains taxed at the same 15%. Trust rules are covered separately in how trusts are taxed in Mauritius, and we do not repeat them here.

Charitable foundations

The Second Schedule, Part I, of the Income Tax Act lists exempt bodies, and it names any charitable institution, charitable Foundation or charitable trust. A foundation set up for charitable objects may therefore fall outside the normal charge. Whether a particular foundation qualifies depends on its charter and on how it is actually run, so it should be confirmed with an adviser before being relied on.

The tax on foundation distributions

When the foundation pays money or assets to a beneficiary, the Income Tax Act treats the payment as a dividend (section 49A). That label drives the beneficiary's position.

Two things are worth keeping apart:

• The classification is a rule, not a choice. A foundation cannot decide to call a payment a gift or a loan to change its tax treatment.
• The consequences for the beneficiary depend on where the beneficiary lives. The Act exempts dividends paid by a Mauritius-resident company from income tax in the recipient's hands (Second Schedule, Part II, Sub-part B, item 1), with no withholding on those dividends. That exemption is written for company dividends. Do not assume it carries over automatically to a foundation distribution; this is a point to put to a tax adviser for your own case.

For a trust, the comparable rule is section 46(4): a distribution to a beneficiary is deemed a dividend for the beneficiary. The wording is parallel, which is why the two structures are often compared. See trust vs foundation for the wider comparison.

Beneficiaries and residence

Residence decides which country has the first claim on a beneficiary's income, so it is the starting point for any beneficiary analysis.

When an individual is resident in Mauritius

Under section 73, an individual is resident in Mauritius if one of the following applies:

• they are domiciled in Mauritius (unless they have a permanent home outside Mauritius);
• they were present in Mauritius for 183 days or more in the income year;
• they were present for 270 days or more, counting the income year and the two preceding years together.

A beneficiary who meets one of these tests is taxed in Mauritius under the ordinary rules for residents. A beneficiary who does not is a non-resident, and the home country's rules and any tax treaty become the main question.

Proving residence

A person who wants to be certified as resident in Mauritius can apply to the Director-General of the MRA for a Tax Residence Certificate. It is to be issued within 7 days of the application, provided the required return (section 112 or 116) has been filed and the service fee paid (section 73(2)-(3)). Under the Income Tax Regulations 1996, article 20A, the fee is MUR 1 000 for an individual, USD 1 000 for a CIS and USD 200 in other cases.

Beneficiaries living abroad

For a beneficiary resident elsewhere, the Mauritius side is only half of the picture. Their home tax authority will decide how to tax a distribution that Mauritius calls a dividend, and it may characterise the payment differently. The Mauritius Revenue Authority lists 45 double taxation avoidance agreements in force (the page carries an update note of 24 August 2021 in its competent authority section), which can limit the overlap. Foreign tax paid can sometimes be credited against Mauritius tax on the same income (section 77), but no credit is given on foreign-source income for which a partial exemption under Part II of the Second Schedule has been claimed.

Treaty texts change. For example, Government Notice No. 136 of 2026 brought into Mauritian law the protocol signed in Port Louis on 7 March 2024 amending the 1982 Mauritius-India convention. Families with Indian connections can read more in Mauritius trusts for Indian resident families, and the wider issue is treated in tax for non-resident beneficiaries of a Mauritius trust.

Quick comparison by situation

A decision path

The tree below follows the questions in the order a practitioner would ask them. It is a prompt for discussion, not a determination.

What the foundation must keep and file

Tax compliance depends on good records. Under sections 36 and 37 of the Foundations Act 2012, a foundation keeps accounts of its receipts, expenses, distributions, purchases, sales, assets and liabilities. At its registered office it keeps copies of the documents filed (the charter and the Articles), the minutes of the Council, and a register of Council members, founders and persons who endowed the foundation. These can be inspected by the founder, the officers, the Registrar and the FSC.

Other structural requirements affect who handles the tax filings:

• The Council must include at least one member who is ordinarily resident in Mauritius (section 17). Details are in the Foundation Council.
• Every foundation needs a secretary, who must be an FSC-licensed corporate service provider (Management Licence) or another Mauritius-resident person authorised by the FSC (section 13).
• The charter must state the name, the founder, the purposes, the initial assets and the beneficiary or how one is designated (section 8). The charter is the foundation's core document; see foundation charter and rules.

The FIAMLA 2002 includes the Foundation in its definition of a legal person and names the Registrar of Foundations among the relevant authorities. Beneficial ownership transparency obligations therefore apply to foundations.

Points that often cause confusion

Foundation tax is not a succession tax

Tax on income and rules on inheritance are separate. A transfer by a non-citizen founder cannot be set aside under the succession rules of that founder's domicile or nationality (Foundations Act 2012, sections 3 and 4). That protects the structure from one kind of challenge; it does not change the income tax analysis. For the succession angle, see whether foundations escape forced heirship.

A foundation is not a global business company

A Global Business Licence holder has its own obligations (core income generating activities in or from Mauritius, central management and control in Mauritius, and administration by an FSC-licensed corporate service provider (Management Licence)). Those obligations belong to licensed companies, not to a family foundation. Do not read the company regimes (for example the partial exemptions in the Second Schedule, which depend on substance conditions) as if they applied automatically to a foundation.

Rules change from year to year

The Income Tax Act is amended by each Finance Act. The Finance Act 2026 shows how: it changed the definition of export of goods, which has nothing to do with foundations, yet it sits in the same Act. Always check the consolidated text current at the time you act.

Practical checklist before you rely on a tax position

• Confirm the date of the version of the Income Tax Act you are reading
• Identify the founder's and each beneficiary's country of residence
• Check whether the foundation's objects are charitable
• Ask how the beneficiary's home country will classify a distribution
• Check whether a treaty applies
• Keep the accounts and registers required by the Foundations Act 2012

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