Under section 124(1)(b) of the Income Tax Act every person, when so required by the Mauritius Revenue Authority ("MRA"), should furnish such information as is demanded of him to enable the MRA to comply with any request for the exchange of information under a tax treaty. The provisions of this sub-section also apply to banks.
Power is also given to the MRA in section 64(9) of the Banking Act to enable the Director General to apply to a Judge in Chambers for an order of disclosure of any information relating to the transactions and accounts of any person by any financial institution.
The Income Tax Act was amended last year to allow the Minister to enter into an arrangement with the government of any foreign country for the exchange of information in respect of any person, including a non-resident of Mauritius. Negotiations have already started with a number of jurisdictions for the conclusion of a Tax Information Exchange Agreement. ("TIEA")
The Financial Services Act too has been amended to require Category 2 Global Business Companies ("GBC 2") to submit to the Financial Services Commission ("FSC") their annual financial summary as well as information on beneficial ownership.
Most of the tax treaties in force in Mauritius provide for the exchange of information in respect of residents of Mauritius as well as non-residents.
A GBC 2 company being a non-resident of Mauritius for tax purposes is not entitled to benefits under a tax treaty but may be covered therein for information exchange purposes. Those tax treaties which do not specifically provide for exchange of information in respect of non-residents are being considered with our treaty partners for update along the international standard.
The MRA and the FSC have signed a Memorandum of Understanding which sets out the framework for effective exchange of information between the two Authorities. The MRA refers mostly to the FSC for information on GBC 2 companies. Information in respect of Category 1 Global Business Companies ("GBC 1") is usually required from their management companies.
To ensure effective exchange of information with our treaty partners in a timely manner, the MRA has adopted a Procedure Manual where clear timelines have been set and will have, in all circumstances, to be strictly complied with.
The procedure requires that a request be, in first instance, made to the taxpayer himself to furnish within a delay of 21 days the information in his possession. The delay may be extended to one month for the production of bank statements.
Where a taxpayer fails to produce bank statements within the time limit, a request will be made directly to the bank. In the event the bank fails to comply within a period of 21 days, an application to the Judge in Chambers will be made for an order of disclosure, as provided in the Banking Act.
We would like to assure all our stakeholders that the MRA does not entertain from treaty partners any information request characterised as fishing expedition. Only those requests for information which are foreseeably relevant or necessary, as provided in the relevant tax treaties, are given due consideration. Treaty partners are also required to use information exchanged with them only for tax purposes in accordance with the provisions of the treaty concerned.
We rely on the understanding and co-operation of all companies, including management companies, to provide within the specified timeline all information that may be requested by the MRA either directly or through the FSC so as to enable the MRA to attend to request for exchange of information with treaty partners in a timely manner.
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