Mauritius: Apportionment of expenses | KPMG | GLOBAL
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Mauritius: Apportionment of expenses attributable to non-taxable capital gains

Mauritius: Apportionment of expenses

The Supreme Court of Mauritius held that common expenses that are attributable to non-taxable capital gains are to be disallowed under the apportionment rules.


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The case is: JPMorgan Sicav Investment Co. (Mauritius) Ltd. v. Assessment Review Committee and the Director General of the Mauritius Revenue Authority


The taxpayer (an investment holding company) held a global business license, and derived income in the form of dividends and interest. It also derived gain on the disposal of investments. The taxpayer treated all its common expenses (expenses relating to taxable income and capital gains) as “allowable expenses.” The tax authority, however, disallowed a portion of the expenses claimed by the taxpayer pursuant to an apportionment formula. 

The Supreme Court of Mauritius noted that capital gains and exempt income are both excluded from the definition of gross income. Thus, expenses considered to be capital in nature and attributable to exempt income are to be disallowed. In concluding, the high court found that a company with non-taxable capital gains cannot claim the tax benefit of deductions of expenses that produce the capital gains.


Read a January 2017 report [PDF 282 KB] prepared by the KPMG member firm in Mauritius

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