Key takeaways
- In Mauritius, a business expense is deductible only if it is incurred wholly and exclusively in producing gross income; capital, private and domestic expenditure is excluded.
- Capital assets are written off through annual allowances rather than expensed, for example 50% a year on computer hardware and software and 100% on plant or equipment costing MUR 60,000 or less.
- Fines, income taxes, charitable donations and (for individuals) entertainment are not deductible, and trading losses can be carried forward for only five years.
Last reviewed: October 2026
Mauritius allows businesses to deduct expenses that are incurred wholly and exclusively to produce taxable income, and to claim capital allowances on business assets. This guide sets out what is deductible, what is not, the allowance rates and the 2026 rules that matter for companies and self-employed professionals, including Global Business Licence (GBL) companies run by location-independent founders.
Key figures: business expenses in Mauritius (2026)
| Item | Figure |
|---|---|
| Corporate income tax (standard) | 15% |
| Individual business income | 0% / 10% / 20% progressive |
| Computer hardware & software allowance | 50% per year |
| Plant/equipment costing ≤ MUR 60,000 | 100% in year of purchase |
| Motor vehicles allowance | 25% per year |
| Trading loss carry-forward | 5 years (capital-allowance losses: indefinite) |
| VAT registration threshold | MUR 3 million turnover |
The Mauritian income year runs from 1 July to 30 June.
What is the general rule for deducting business expenses?
The Income Tax Act 1995 allows a deduction for outgoings and expenses incurred wholly and exclusively in the production of gross income. In practice, three questions decide whether a cost is deductible:
- Is it revenue, not capital? Day-to-day running costs are deductible. Buying an asset that lasts several years is capital; you recover it through capital allowances.
- Is it for the business, not private life? Domestic or private expenditure is excluded, even if it is paid from the business account.
- Does it relate to taxable income? Costs that produce exempt income cannot be deducted.
The Mauritius Revenue Authority (MRA) can ask for supporting documents and, for interest, a certificate from a qualified auditor. Invoices, contracts and a clear business purpose are your best defence.
Which expenses are deductible in Mauritius?
Typical deductible costs for a trading company or a self-employed professional include:
- Premises: rent, municipal taxes on business buildings, utilities, repairs and maintenance.
- Staff: salaries, wages, bonuses and employer social contributions (CSG, National Savings Fund, training levy).
- Professional fees: accounting, audit, legal, company secretarial and management company fees.
- Marketing and sales: advertising, website hosting, software subscriptions and commissions.
- Interest: only on capital employed exclusively in producing gross income.
- Bad debts: when legal action has been taken against the debtor; general provisions are not deductible.
- Payments to foreign affiliates: royalties, interest and service fees, provided they reflect actual services, are reasonable and do not exceed arm's-length amounts.
- Irrecoverable input VAT.
Capital allowances: how are assets written off?
Tax depreciation follows its own rates, not your accounting depreciation. Main annual allowance rates (on base value, unless stated otherwise):
| Asset | Annual allowance |
|---|---|
| Computer hardware, peripherals and software | 50% |
| Plant or machinery costing MUR 60,000 or less | 100% |
| Electronic, high-precision or automated equipment | 100% |
| Solar energy unit | 100% |
| Motor vehicles | 25% |
| Furniture and fittings | 20% |
| Other plant or machinery (above MUR 60,000) | 35% |
| Green technology equipment; R&D | 50% |
| Commercial and industrial premises | 5% |
| Goodwill (capitalised) | 5% |
Allowances are recaptured on disposal through a balancing charge or allowance.
Example. A freelance UX designer resident in Mauritius invoices MUR 2,400,000 in the 2025–26 income year and spends MUR 600,000 on deductible running costs: a co-working membership, software subscriptions, client travel and accounting fees. Taxable income falls to MUR 1,800,000 (before any capital allowance on her new laptop). Under the 0%/10%/20% scale her tax is MUR 210,000, against MUR 330,000 had nothing been deducted – a saving of MUR 120,000, or 20% of the expenses.
Which expenses are not deductible?
The following are added back when computing taxable income:
- Fines and penalties – they are not incurred in producing income.
- Income taxes, including foreign income taxes (relief is given by credit instead).
- Charitable and other donations – not deductible for companies.
- Entertainment, gifts and donations – listed as non-deductible for individuals carrying on a business.
- Reserves and provisions, such as general bad-debt provisions.
- Start-up costs – pre-operational expenses are not deductible.
- Accounting amortisation of goodwill – only the 5% tax allowance on capitalised cost is available.
- Private and domestic costs, including the private use share of a car or home.
Which expenses have limits or special conditions?
| Expense | Condition |
|---|---|
| Interest | Only on capital employed exclusively to produce income; may be refused if the lender is not taxed on it |
| Bad debts | Deductible after legal action; provisions not allowed |
| Leases (IFRS 16) | Operating lease rentals deductible; interest component and right-of-use depreciation not allowed |
| Related-party fees | Must be real, reasonable and at arm's length; withholding tax may apply |
| Tax losses | 5-year carry-forward, 50% shareholding continuity required; no carry-back |
Business expenses for GBL companies and remote founders
Many location-independent professionals use a Mauritian company – often a Global Business Licence (GBL) company – to invoice international clients. Expense rules apply in the same way, with a few interactions to watch:
- Partial exemption. Certain foreign-source income (for example foreign dividends, interest and some leasing income) is 80% exempt, giving an effective rate of 3%. Expenses linked to exempt income are not deductible, so costs must be allocated between exempt and taxable income.
- Substance. GBL companies must meet substance requirements in Mauritius. Paying local directors, a management company and office costs is deductible, but it is also what supports the company's residence and treaty access.
- Permanent-establishment risk. If you manage the company from another country, that country may tax the profits, and the expenses incurred there may not be recognised in Mauritius. Align where decisions are made with where the company is resident.
- New levies. The Fair Share Contribution (2025–2028) and the Corporate Climate Responsibility levy apply to larger companies; GBL companies are excluded from the Fair Share Contribution. From 1 July 2026, an alternative minimum tax of 10% of book profit applies to certain sectors (hotels, insurance, financial intermediation, real estate, telecoms), excluding GBL companies.
What records should you keep?
- Keep invoices in the company's or your own name, with the MRA-compliant VAT details where applicable.
- Document the business purpose of travel, meals and client events.
- Maintain a fixed-asset register to calculate allowances and balancing adjustments.
- Keep transfer-pricing support for payments to related foreign companies.
- Retain records for at least 5 years – the MRA can generally raise assessments for the 3 previous income years (longer in case of fraud or wilful neglect).
Frequently asked questions
What business expenses are tax deductible in Mauritius?
Expenses are deductible when they are incurred wholly and exclusively in producing gross income: rent of business premises, salaries, professional fees, marketing, utilities, software subscriptions and travel for business. Capital assets are not expensed directly; instead you claim annual allowances, for example 50% a year on computer hardware and software or 100% on equipment costing MUR 60,000 or less.
Are entertainment expenses deductible in Mauritius?
Generally no. PwC's Mauritius summary lists entertainment expenses among non-deductible items for individuals in business, together with gifts, donations and private expenditure. Keep client meals clearly linked to a business purpose and documented, but plan on the assumption that entertainment will be added back when computing taxable income.
Are charitable donations deductible for Mauritian companies?
No. Donations to charitable institutions or otherwise are not deductible for corporate income tax. Companies instead must allocate 2% of the previous year's chargeable income to a Corporate Social Responsibility (CSR) fund, with at least 50% of funds set up from 1 January 2026 remitted to the Mauritius Revenue Authority.
How long can tax losses be carried forward in Mauritius?
Trading losses can be carried forward for up to five income years, provided at least 50% of the shareholding remains unchanged. Losses attributable to capital allowances can be carried forward indefinitely. Mauritius does not allow losses to be carried back to earlier years.
Is input VAT deductible in Mauritius?
Registered persons recover input VAT through their VAT returns rather than deducting it as an expense. VAT registration is required above MUR 3 million of annual turnover, and some professionals such as accountants, lawyers and consultants must register regardless of turnover. Input VAT that cannot be recovered can be deducted as a business cost.
Related guides
- Legal forms of business in Mauritius
- Tax incentives for expats and digital nomads in Mauritius
- How to obtain tax residency in Mauritius
- Capital gains tax in Mauritius
- Business expenses in Malta
Sources
- PwC Worldwide Tax Summaries – Mauritius, Corporate: Deductions
- PwC Worldwide Tax Summaries – Mauritius, Corporate: Taxes on corporate income
- PwC Worldwide Tax Summaries – Mauritius, Individual: Deductions
- PwC Worldwide Tax Summaries – Mauritius, Individual: Taxes on personal income
- PwC Worldwide Tax Summaries – Mauritius, Corporate: Other taxes
This article is general information, not personalised tax advice.
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