Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Double Taxation Relief Manual

From
HM Revenue & Customs
Updated
, see all updates

DT: Mauritius: double taxation agreement, Article 10: Dividends

Article 10 was substituted by SI87/467 below, and takes effect in relation to dividendspaid on or after 1 July 1986

1. 

a. Dividends derived from a company which is a resident of the United Kingdom by a resident of Mauritius may be taxed in Mauritius.

b. Where a resident of Mauritius is entitled to a tax credit in respect of such a dividend under paragraph (2) of this Article, tax may also be charged in the United Kingdom, and according to the laws of the United Kingdom, on the aggregate of the amount or value of that dividend and the amount of that tax credit at a rate not exceeding 15 per cent.

c. Except as aforesaid dividends derived from a company which is a resident of the United Kingdom by a resident of Mauritius who is the beneficial owner of the dividends shall be exempt from any tax in the United Kingdom which is chargeable on dividends.

  1. A resident of Mauritius who receives a dividend from a company which is a resident of the United Kingdom shall, subject to the provisions of paragraph (3) of this Article and provided he is the beneficial owner of the dividend, be entitled to the tax credit in respect thereof to which an individual resident in the United Kingdom would have been entitled had he received that dividend, and to the payment of any excess of that tax credit over his liability to United Kingdom tax.

  2. The provisions of paragraph (2) of this Article shall not apply where the beneficial owner of the dividend is, or is associated with, a company which either alone or together with one or more associated companies controls, directly or indirectly, 10 per cent or more of the voting power in the company paying the dividend. For the purposes of this paragraph, two companies shall be deemed to be associated if one controls, directly or indirectly, more than 50 per cent of the voting power in the other company, or a third company controls more than 50 per cent of the voting power in both of them.

  3. Dividends derived from a company which is a resident of Mauritius by a resident of the United Kingdom may be taxed in the United Kingdom. Such dividends may also be taxed in Mauritius and according to the laws of Mauritius, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed:

d. 10 per cent of the gross amount of the dividends if the beneficial owner is a company which controls, directly or indirectly, at least 10 per cent of the voting power in the company paying the dividends;

e. 15 per cent of the gross amount of the dividends in all other cases.

5. the term ‘dividends’ as used in this Article means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights assimilated to income from shares by the taxation laws of the State of which the company making the distribution is a resident, and also includes any other item which, under the laws of the Contracting State of which the company paying the dividend is a resident, is treated as a dividend or distribution of a company.

  1. The provisions of paragraphs (1), (2) and (4) of this Article shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividend is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14 of the Convention, as the case may be, shall apply.

  2. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company’s undistributed profits, to a tax on the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.