The Mauritius Financial Services Commission has recently held a Foreign Account Tax Compliance Act workshop ahead of automatic exchange of tax information with the US by the territory’s financial institutions.

In her opening comments, FSC Chief Executive Clairette Ah-Hen said the territory’s involvement in FATCA will enhance the reputation of Mauritius as a “clean and transparent” jurisdiction.

On a practical level, she said that failure to comply would lead to the imposition of a 30 percent withholding tax on US-sourced income.

Instead, Mauritius concluded a FATCA Intergovernmental Agreement (IGA) with the US in December last year, which will ease the administrative burden on financial institutions, which would otherwise have had to establish direct lines of communication with the Internal Revenue Service (IRS).

Ah-Hen said:

• “The agreement Mauritius and the US signed introduces reporting requirements for US financial institutions with respect to certain accounts held by Mauritians in the US as well.
• The reciprocal nature of this agreement underscores the shared efforts of both countries to combat tax evasion.
• This objective will mutually benefit both countries and discourage tax abuses through increased transparency and enhanced reporting.”

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