New Budget for 2025–2026 Aligns Tax Policies with OECD Pillar 2
Introduc tion
As part of its budget for 2025–2026, the Republic of Mauritius has announced significant tax reforms, including the adoption of a global minimum tax. This measure is part of the country’s compliance with the recommendations of Pillar 2 of the BEPS project promoted by the OECD/G20, which will directly affect the Transfer Pricing strategies of multinational groups operating in the country.
Key Budget Reforms
Among the main provisions announced are:
Domestic Minimum Top-Up Tax (DMTT): Effective from July 1, 2025, this tax aims to ensure a minimum tax rate of 15% in line with the GloBE rules.
Alternative Minimum Tax (AMT): Reintroduced for certain companies and based on sectoral and financial criteria.
Fair Share Contribution (FSC): Additional contribution on added value aimed at companies with high incomes.
These measures are intended to strengthen the tax system, prevent tax base erosion, and ensure more equitable taxation of corporate profits.
Transfer Pricing Implications
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 filed, especially regarding intra-group transactions.
In this context, regulatory compliance becomes crucial to avoid tax adjustments or contingencies associated with prices not aligned with the Arm’s Length Principle.
Call to Action
At TPC Group, we advise multinational companies to comply with their tax obligations in the Republic of Mauritius and other jurisdictions subject to Pillar 2.
Our team helps you:
- Assess the tax effects of the new measures.
- Restructure your Transfer Pricing policies under international regulations.
- Prepare the documentation required by the Mauritian tax authority.
Source: Orbitax