New 2025–2026 budget aligns tax policies with OECD Pillar 2
Introduction
As part of its 2025–2026 budget, the Republic of Mauritius has announced significant tax reforms, including the adoption of a global minimum tax. This measure is part of the implementation of the recommendations of Pillar 2 of the BEPS project promoted by the OECD/G20, which will have a direct impact on the transfer pricing strategies of multinational groups operating in the country.
Key budget reforms
The main provisions announced include:
- Domestic Minimum Transfer Tax (DMTT): Applicable from July 1, 2025, this tax seeks to ensure a minimum tax rate of 15% in line with GloBE rules.
- Alternative Minimum Tax (AMT): Reintroduced for certain companies, based on sectoral and financial criteria.
- Fair Share Contribution (FSC): Additional contribution on added value, aimed at companies with high revenues.
These measures are intended to strengthen the tax system, prevent tax base erosion, and ensure fairer taxation of corporate profits.
Implications for transfer pricing
The reforms adopted require a technical review of transfer pricing policies, considering the following aspects:
- The assessment of the effective tax rate per entity.
- The inclusion of taxes such as DMTT and AMT in the analysis of “covered taxes” under the GloBE rules.
- Consistency in local documentation and information reports to be submitted, especially in relation to intra-group transactions.
In this context, regulatory compliance becomes crucial to avoid tax adjustments or contingencies associated with prices that are not aligned with the arm’s length principle.
Call to action
At TPC Group, we advise multinational companies on complying with their tax obligations in the Republic of Mauritius and other jurisdictions that have adhered to Pillar 2.
Our team helps you:
- Assess the tax impact of the new measures.
- Restructure your transfer pricing policies in accordance with international regulations.
- Prepare the documentation required by the Mauritian tax authority.
Source: Orbitax