How Trusts Are Taxed in Mauritius

Trust taxation in Mauritius at a glance

Trust taxation in Mauritius is built around the trust itself. Under the Income Tax Act 1995, as consolidated by the Mauritius Revenue Authority (MRA) up to the Finance Act 2026, any trust is taxable on its taxable income at the Part IV rate of the First Schedule, which is 15%. The trust is therefore the first taxpayer in the chain, before any money reaches a beneficiary.

The second layer concerns the people around the trust. Section 46(4) of the Income Tax Act treats any distribution to a beneficiary as a dividend in the beneficiary's hands. The settlor, for their part, is not taxed because the trust exists; what matters is their own situation and the powers they keep.

Anyone searching for "mauritius trust tax" will find claims that sound simpler than the law. This page takes the opposite approach. It describes each rule, the condition attached to it and the points where the answer depends on facts that only an adviser can assess. It is general information, not advice on your own case.

The three taxpayers: trust, settlor and beneficiaries

A family trust involves several people, and each has a different tax question. Keeping the three apart avoids most confusion.

A fourth question sits beside these: the trustee's reporting duties. They are practical rather than fiscal, but they shape how the tax position is documented. They are covered further down.

How the trust itself is taxed

The 15% rate on taxable income

The Income Tax Act provides that a trust is taxable on its taxable income at the Part IV rate, 15%. This is also the standard corporate rate: the Act sets the standard rate for companies at 15% of taxable income under Part IV of the First Schedule, for income years starting on or after 1 July 2010.

Two points follow from this wording.

• The charge falls on taxable income, not on the capital held. The assets placed in a trust are not taxed simply because they sit in it.
• The trustee is the person who deals with the tax authority on the trust's behalf. How the filing works in practice is explained in the page on trust tax returns and filing.

Section 46(2): the non-resident trust provision

Section 46(2) of the Income Tax Act still refers to two categories of trust. The first is a trust whose settlor is non-resident (or holds a Global Business Licence) and all of whose beneficiaries are non-resident (or hold a Global Business Licence). The second is a purpose trust whose purpose is carried out outside Mauritius.

The important point is what the provision no longer does. Such a trust remains taxed at the same 15% Part IV rate. Being linked to non-residents does not, on its own, move the trust outside the charge to tax.

What the 2021 repeal removed

Older descriptions of Mauritius trusts often mention an exemption for non-resident trusts. That exemption has gone. The Finance Act 2021 repealed section 46(3) of the Income Tax Act, with deemed effect from 1 July 2021. Before the repeal, a trust could claim exemption by filing a declaration of non-residence within 3 months after the end of the income year. The consolidated Act up to the Finance Act 2026 no longer contains this exemption.

The same reform affected foundations: the Finance Act 2021 repealed sections 49A(2) and (3), which had exempted a foundation whose founder and all beneficiaries were non-resident (or Global Business Licence holders) on filing a declaration of non-residence, again with deemed effect from 1 July 2021.

Any article, brochure or structure written before that date and still relying on a "declaration of non-residence" should be read with this change in mind. This is a reason to check the date of any source you rely on.

Distributions: a payment treated as a dividend

What section 46(4) says

Section 46(4) of the Income Tax Act provides that any distribution made to a beneficiary of a trust is deemed to be a dividend for that beneficiary. The earlier paragraphs 5 and 6, which dealt with a deduction for distributed income and an exemption for a non-resident beneficiary, have been removed.

In practical terms, the legislator has stopped treating the trust as a simple conduit. The trust is taxed on its income, and the payment to the beneficiary is then characterised as a dividend.

Why the dividend label matters

The label determines what the beneficiary may owe. For comparison, dividends paid by a company resident in Mauritius are exempt from income tax in the hands of the recipient (Second Schedule, Part II, Sub-part B, item 1), and no withholding tax is provided on those dividends. That rule concerns company dividends. It does not by itself tell you how a deemed trust dividend is treated for a given beneficiary in a given country, and the position of a beneficiary resident abroad will also depend on the rules of that country.

For the beneficiary's side of the question, see the dedicated pages on distributions to beneficiaries and on non-resident beneficiaries of a Mauritius trust. Where treaties are relevant, remember that the MRA reports 45 double taxation avoidance agreements in force, on a page that carries an update note dated 24 August 2021. Whether a treaty applies depends on the facts and on the text of the agreement concerned.

Treaty shopping and the India example

Treaty benefits are not automatic. Government Notice No. 136 of 2026, the Double Taxation Avoidance Agreement (India) (Amendment) Regulations 2026, made by the Minister on 29 July 2026, brings into Mauritian law the protocol signed in Port Louis on 7 March 2024, which amends the 1982 Mauritius–India convention.

The protocol adds an Article 27B, "Entitlement to benefits", which applies a principal purpose test. A treaty benefit is denied where it is reasonable to conclude that obtaining it was one of the principal purposes of an arrangement, unless granting it is in line with the object and purpose of the convention. The preamble is also amended to refer to treaty shopping.

The lesson for a family is general. A structure that exists mainly to obtain a treaty advantage is exposed. A structure set up for succession or family governance reasons, and documented as such, stands on firmer ground.

The settlor: what the Trusts Act allows and what it means for tax

Roles the settlor may hold

Section 8 of the Trusts Act 2001 allows the settlor to be also a trustee, a beneficiary, a protector or an enforcer. The settlor cannot, however, be the sole beneficiary of the trust they created. A transfer by a non-citizen settlor cannot be set aside under the succession rules of their domicile or nationality.

These rules are legal, not fiscal, but they feed the tax analysis. The more roles a settlor accumulates, the more a tax authority may ask whether the trust is genuinely separate from the person who created it. The page on how much control a settlor can keep explores that boundary, and the page on sham trusts explains what happens when a court finds that the structure is not what it claims to be.

Revocability and the protector

Section 11 of the Trusts Act 2001 presumes that a trust is irrevocable by the settlor and the settlor's legal representative, unless there is an express power of revocation in the deed. Section 24 allows the deed to provide for a protector, who may be an adult (including the settlor) or a legal person, and who advises the trustee. Unless the deed says otherwise, the protector may remove and appoint trustees, fix the governing law, change the place of administration and withhold consent to certain acts, without becoming a trustee.

From a tax point of view, a revocable trust or a trust in which the settlor keeps wide powers raises a different question from a settled, irrevocable one. The Act's presumption of irrevocability is the starting point; any departure from it deserves a specific tax review, usually in both the settlor's country and Mauritius.

Transfers into the trust

Whether a transfer of assets into a trust triggers a charge depends on the type of asset, the status of the settlor and the rules of any other country involved. This is treated separately in tax when you transfer assets into a trust. It is the point at which a mistake is most often made, because the transfer happens once and is hard to reverse.

Beneficiaries and the rights that shape their tax position

The tax position of a beneficiary depends on what they actually receive and on whether the trust is discretionary or fixed. A beneficiary with only a hope of benefit, as in a discretionary arrangement, is in a different position from one with a defined entitlement. The distinction is explained in discretionary trusts.

Beneficiaries who are unsure of their status may find it helpful to ask the trustee for information. Whatever the tax result, the trustee must keep proper records, which leads to the next section.

Records, registers and transparency

Tax treatment rests on documents. Mauritius requires several kinds of record to be held, and they all end up supporting the tax position of the trust.

• Trustee's records. Section 38(3) of the Trusts Act 2001 requires the trustee to keep up-to-date accounts and documents, together with an alphabetical register of the names and last known addresses of each beneficiary and settlor. This applies even to a foreign non-resident trust that the trustee administers. Accounting records must be kept for at least 5 years after the completion of the operations concerned.
• Register kept by the FSC. Section 26A of the Financial Services Act 2007 requires the Financial Services Commission (FSC) to keep a register of domestic trusts and of foreign trusts that have at least one qualified trustee. It holds, among other things, the name and characteristics of the trust, the trust deed and its amendments, the identity and addresses of beneficiaries, trustees, settlors, protectors and enforcers, the purpose, the governing law, the place of administration and the service providers. The version consulted is the consolidated text as at 1 September 2026.
• Licensee registers. Section 29 of the same Act requires each licensee to keep at all times a register of the beneficial owners of each client (in force since 1 October 2018). Each qualified trustee must also keep a register of every trust under its administration, available to the FSC on request (paragraph 5(aa), in force since 1 August 2024). These duties apply to existing as well as new clients and trusts.
• Beneficial ownership. In the FIAMLA 2002 (FIU version of 2026), the beneficial owner of a trust-type legal arrangement includes the settlor, the trustee, any protector, each beneficiary (or the class of beneficiaries and objects of a power) and any other natural person exercising ultimate effective control, including through a chain of control.

The FSC also publishes Practice Notes for qualified trustees and corporate service providers offering corporate trusteeship. They explain how to keep beneficial ownership information up to date: settlor, trustee, protector, enforcer, beneficiaries and any effective controller. The document read is not dated. For the question of whether the trust register is public, see the register of trusts.

These registers are not tax returns. They do, however, mean that the tax position of a trust is never anonymous to the authorities, and they explain why accurate records are the first line of defence in any enquiry.

Foundations, purpose trusts and charitable trusts

Families sometimes compare a trust with a foundation on tax grounds. The comparison is shorter than expected.

Section 49A of the Income Tax Act makes any foundation taxable on its taxable income at the Part IV rate of 15%, and treats any distribution to a beneficiary as a dividend. The mechanics therefore mirror those of a trust. Under the Foundations Act 2012 (sections 3 and 4), a foundation may pursue charitable or non-charitable objects for a person, a class of persons or a specific purpose, and the founder may be a beneficiary. The FIAMLA 2002 includes the foundation within the definition of legal person and names the Registrar of Foundations among the relevant authorities, so beneficial ownership transparency rules apply to it. The tax side is developed in how foundations are taxed, and the structural comparison in trust vs foundation.

Purpose trusts

Under section 19 of the Trusts Act 2001, a purpose trust, charitable or not, is valid without a beneficiary if:

• its purpose is specific, reasonable, achievable and lawful;
• the deed provides for an enforcer and a successor enforcer;
• at least one trustee is a qualified trustee; and
• the deed provides for what happens to any surplus assets when the trust ends.

Under section 21, the same person cannot be both trustee and enforcer of the same trust. The enforcer is entitled to the annual accounts, a copy of the trust deed and the legal advice received by the trustees.

Charitable trusts

Section 20 of the Trusts Act 2001 deems a trust charitable where its exclusive object is one of the following: relief of poverty, education, religion, protection of the environment, human rights and fundamental freedoms, or any other purpose beneficial to the public. It may be discretionary and may pursue its aims in Mauritius or elsewhere. Part I of the Second Schedule to the Income Tax Act lists, among the exempt bodies, any charitable institution, charitable foundation or charitable trust. Exemption is a matter of qualification and evidence, not of the label alone.

Common misunderstandings

"A trust reduces tax"

Some websites present trusts as tools to reduce tax. The law does not work that way. A trust changes who holds assets and who decides about them; the tax outcome comes from the rules above and from the rules of the countries involved. The page on whether a trust can reduce tax explains why this framing is unreliable.

"A non-resident trust is outside the system"

For a trust in Mauritius, that was arguably the position under the repealed exemption. Since 1 July 2021 that exemption has no place in the consolidated Act, and section 46(2) confirms that the 15% rate still applies to the trust with non-resident links.

"A foreign trust is untouchable"

Section 60 of the Trusts Act 2001 provides that a foreign trust is governed by its terms and by its own law. It is not enforceable in Mauritius where it would constitute an offence, be contrary to public policy or apply directly to immovable property situated in Mauritius. The recognition framework is detailed in how Mauritius recognises foreign trusts.

"Spendthrift and protective features change the tax rate"

Section 18 of the Trusts Act 2001 recognises protective or spendthrift trusts: a beneficiary's interest may be made subject to termination, restraint on alienation or suspension on the beneficiary's insolvency or the seizure of their property. These features concern protection, not taxation. The tax charge on the trust and on distributions follows the same rules.

Companies held by a trust: residence in brief

A trust often owns shares in a company, and the company has its own tax residence. Under section 73 of the Income Tax Act, a company is resident in Mauritius if it is incorporated there or if its central management and control are in Mauritius. Section 73A treats a company incorporated in Mauritius as non-resident if it is centrally managed and controlled outside Mauritius, but it must still file an income tax return under section 116. The detailed residence tests are covered elsewhere and are not repeated here.

For a family trust, the lesson is simply that the trust and its underlying companies are separate taxpayers, each with its own analysis.

Other levies that may touch a company in the structure

Some levies apply to companies rather than to trusts, yet they can matter when a trust owns a business.

• The QDMT tax is due where the combined effective tax rate of the covered persons is below 15%. The top-up is (15% − combined effective rate) × excess profit. It applies from 1 July 2025.
• The CCR Levy cannot be reduced by any tax credit, except the credit provided under section 161A(58A) and a credit under section 76.
• Under section 50L, each company sets up a CSR fund equal to 2% of its taxable income of the previous year. The share of the fund to be paid to the MRA is at least 75% for funds set up from 2019 to 31 December 2025, at least 50% for those set up from 1 January to 31 December 2026, and at least 75% from 2027. The rest finances CSR programmes.

These rules sit at company level. Whether any of them reaches a given family structure depends on its size and make-up.

Expatriates and the remittance basis

Families that move to Mauritius sometimes combine a trust with a residence scheme. The Golden Visa carries the same tax advantages as the Premium Visa: foreign employment income is taxed only if remitted to Mauritius, local spending on a foreign credit or debit card is not deemed to be remitted, and funds placed in a Mauritian account are not taxed on a declaration that the applicable taxes were already paid abroad. The Finance Act 2026 (Act 14) extends sections 73B and 74A of the Income Tax Act to the "golden visa", with effect from 1 September 2026. This is a remittance-basis regime. It does not alter the taxation of a trust as such.

Practical checklist before you rely on any tax statement

• Check that the source refers to the Income Tax Act as consolidated up to the Finance Act 2026
• Look for any reliance on the repealed non-resident exemption
• Identify the tax residence of the settlor, the trustee and each beneficiary
• List the retained powers of the settlor and the protector in the deed
• Confirm which records the trustee holds and where they are kept
• Ask for advice in every country where a party is tax resident

Reviewing these points once a year is good practice; the annual family trust review checklist offers a fuller list. If you would like a licensed provider to look at your situation, you can use the contact form.