France-Mauritius Tax Treaty: How to Avoid Double Taxation

A French resident receiving Mauritian dividends, a retiree who has settled in Port Louis and an investor setting up a company in Mauritius all face the same question: how can double taxation between these two jurisdictions be avoided? The France-Mauritius tax treaty, signed in 1980 and amended by a protocol in 2011, provides a precise legal answer by allocating taxing rights between the two States according to the nature of each type of income.

Tax residence, withholding tax on dividends, interest and royalties, taxation of real estate, the treatment of pensions and the absence of rules on inheritance tax: each situation calls for its own analysis. Since the OECD's BEPS Multilateral Instrument began to apply, a general anti-abuse clause has also governed international tax planning structures.

This article walks through the treaty article by article, explaining the practical mechanisms that secure your tax position between France and Mauritius, with the applicable rates, the formalities to complete and the points to watch in 2026.

Historical and legal framework of the tax treaty

Signature, entry into force and the 2011 amending protocol

The tax treaty between the Government of the French Republic and the Government of Mauritius for the avoidance of double taxation with respect to taxes on income and on capital was signed in Port Louis on 11 December 1980. It comes with a protocol that forms an integral part of it. Approved in France by Law No. 82-483 of 10 June 1982 and published by Decree No. 82-912 of 14 October 1982 in the French Journal Officiel, it entered into force on 17 September 1982.

An amending protocol signed in Port Louis on 23 June 2011 replaced Article 27 on exchange of information to bring it into line with the OECD standard: bank secrecy can no longer be invoked to refuse a request for information from the other State. The treaty text is available on impots.gouv.fr, and the Mauritius Revenue Authority (MRA) publishes a synthesised text incorporating the changes made by the BEPS Multilateral Instrument.

Objectives: preventing tax evasion and double taxation

The treaty's primary objective remains the elimination of double taxation for individuals and businesses with cross-border activities between the two territories. Since the BEPS Multilateral Instrument, its preamble also states that it must not create opportunities for non-taxation or reduced taxation through tax evasion or avoidance. On the French side, the official tax guidance (BOFIP, BOI-INT-CVB-MUS) presents the text. For any expatriate or investor, understanding these treaty rules is an essential first step towards sound, compliant tax planning.

Determining tax residence under the treaty

Residence criteria for individuals

Article 4 of the France-Mauritius tax treaty sets out the residence criteria used to determine in which State an individual is treated as resident for tax purposes. A resident of a State is any person liable to tax there by reason of domicile, residence or any similar criterion. Treaty tax residence does not always coincide with tax domicile under French domestic law (Article 4 B of the French General Tax Code): a taxpayer may be domiciled in France under French law yet be treated as resident in Mauritius for treaty purposes.

Where an individual is resident in both States, the treaty provides successive tie-breaker rules, applied in the following order:

• the permanent home, meaning a dwelling available to the person on a lasting basis;
• if there is a permanent home in both States, the centre of vital interests, meaning the State with which personal and economic ties are closest;
• the habitual abode;
• nationality;
• failing that, mutual agreement between the competent authorities of the two States.

For example, a French executive present in Mauritius for more than 183 days a year (the residence test under Mauritian domestic law), whose only permanent home is there and who works there, will generally be treated as a Mauritian resident for treaty purposes, even if he or she keeps ties with France.

Place of effective management for companies

For legal entities, the treaty uses the place of effective management to resolve cases of dual residence. This is where the company's strategic and management decisions are actually taken, regardless of its place of incorporation.

How can double taxation between France and Mauritius be avoided?

Article 24 of the treaty sets out how double taxation is eliminated. For a French resident, it combines two mechanisms: exemption with progression, which is the general rule, and the tax credit method, which applies to specific categories of income.

Exemption with progression

Income that the treaty allows Mauritius to tax is, in principle, exempt from tax in France. This applies in particular to salaries from work performed in Mauritius, income from real estate located in Mauritius and profits of a Mauritian permanent establishment.

This income is nevertheless taken into account to determine the tax rate applied to the household's other income. In practice, the French tax authorities compute the tax on total income, French and Mauritian, derive an average rate, and then apply that rate only to the income taxable in France. Progressivity is thus preserved.

The tax credit method

Some Mauritian-source income remains taxable in France, with double taxation relieved by a tax credit set against French tax:

• Interest, royalties, income from independent professions carried out through a fixed base in Mauritius, directors' fees and income of entertainers and athletes: the tax credit equals the Mauritian tax actually levied;
• Dividends: the tax credit is a flat amount equal to 25% of the gross dividends.

In all cases, the tax credit cannot exceed the French tax attributable to that income. Any excess cannot be offset against other income and is not refundable. The credit is set against income tax (or corporate income tax), not against French social security levies.

Worked example: a French resident receives €10,000 of gross dividends from a Mauritian company. Mauritius levies no withholding tax on dividends under its domestic law. In France, the dividends are taxable. The theoretical treaty credit is €2,500 (25%), but it is capped at the French tax attributable to these dividends, for example €1,280 at the 12.8% flat income tax rate. The taxpayer therefore offsets €1,280 and pays no additional income tax on these dividends, although social security levies remain due. The application of this flat credit should be confirmed case by case in light of French administrative guidance and the anti-abuse clause (see below).

Taxation of investment income: withholding tax rates and the beneficial ownership requirement

The France-Mauritius treaty governs the withholding tax applicable to cross-border financial flows. For investors and business owners structuring operations between France and Mauritius, understanding these rules is a prerequisite for any lawful tax planning.

Applicable withholding tax rates

For certain categories of income, the treaty caps the tax that the source State may levy. These rates apply provided that the recipient is resident in the other State and is the beneficial owner of the income.

Type of income	Maximum tax in the source State
Dividends paid to a company (other than a partnership) holding directly at least 10% of the capital	5%
Dividends: all other cases (including individuals)	15%
Interest: general case	No treaty cap: domestic rate of the source State
Interest paid to the State, a public body or a banking institution of the other State	Exempt (taxable only in the State of residence)
Royalties: patents, trademarks, designs, processes, know-how	15%
Royalties: copyright in literary, artistic or scientific works, including films and audiovisual works	Exempt (taxable only in the State of residence)

These caps only matter where domestic law imposes a higher rate. In practice, Mauritius levies no withholding tax on dividends paid to non-residents, whereas France does. Treaty rates should therefore always be compared with the domestic rules of the source State.

Beneficial ownership

Reduced rates are available only to the beneficial owner of the income. This concept is intended to rule out structures that interpose conduit or shell companies solely to obtain treaty benefits artificially.

In practice, the tax authorities examine whether the recipient has genuine power to dispose of the dividends, interest or royalties received, rather than a contractual or de facto obligation to pass them on. International groups must therefore carefully document the economic substance of their Mauritian subsidiaries.

Taxation of real estate between France and Mauritius

Taxation of rental income

Article 6 of the treaty sets out a standard principle: income from real estate is taxable in the State where the property is located. A Mauritian resident receiving rent from an apartment in Paris is taxed in France on that income. Conversely, a French resident who owns a villa in Mauritius is taxed in Mauritius on the Mauritian rent. In France, that rent is exempt but must be reported for the purpose of the effective rate calculation. The rule covers all real estate located in either State, including usufruct and income from agricultural or forestry operations. The protocol extends it to income from shares in property-rich companies where the State of location treats such income as real estate income.

Capital gains on real estate

Article 13 applies the same principle to capital gains on real estate: a gain on the sale of property located in France is taxable in France, even if the seller is resident in Mauritius. Symmetrically, the sale of property located in Mauritius falls within Mauritius's taxing rights. Mauritius does not tax capital gains, but the resale of property there triggers a land transfer tax payable by the seller. For a French resident, this Mauritian gain is in principle exempt from French income tax under the exemption method. The protocol also allows the State of the company to tax gains on the sale of substantial shareholdings, meaning at least 25% of the rights to profits.

French real estate wealth tax (IFI)

The treaty also covers capital (Article 23): real estate may be taxed in the State where it is located. As Mauritius has no wealth tax, this rule has little practical effect. A French tax resident remains liable to the French real estate wealth tax (IFI) on worldwide real estate, Mauritian property included, with no foreign tax to credit. A Mauritian resident is liable to IFI only on real estate located in France.

Pensions, employment and permanent establishments: what the treaty changes

Tax treatment of pensions

For anyone planning to retire in Mauritius, the taxation of pensions is a central issue. The treaty in fact distinguishes three categories, and this is where mistakes are most common.

• Social security pensions (Article 18, paragraph 2): pensions and other payments made under the social security legislation of a State are taxable only in that State. The French tax authorities treat as such not only the basic state scheme (CNAV, MSA, SSI, etc.) but also mandatory supplementary schemes such as AGIRC-ARRCO. These pensions therefore remain taxable in France, even once the retiree has become a Mauritian tax resident.
• Private pensions (Article 18, paragraph 1), such as supplementary company pensions or annuities from voluntary retirement savings plans: they are taxable only in the State of residence, i.e. in Mauritius for a Mauritian resident. Exception: if the recipient is not taxed on these pensions in the State of residence, the source State regains the right to tax them.
• Government pensions (Article 19), paid for services rendered to the State, a local authority or a public body: they are taxable in the paying State. They may also be taxed in the other State if the recipient is both a resident and a national of that State.

Practical example: a former private-sector executive who has become a Mauritian tax resident receives €2,500 a month in CNAV and AGIRC-ARRCO pensions, plus an annuity from a supplementary company pension scheme. The CNAV and AGIRC-ARRCO pensions remain taxable in France under the rules for non-residents. Only the supplementary annuity falls under Mauritian taxation. Moving to Mauritius therefore does not remove French tax on most private-sector pensions.

Employment income and permanent establishments for entrepreneurs

Salaries are taxable in the State where the work is performed (Article 15). They nevertheless remain taxable in the State of residence for short assignments, provided three conditions are met: presence of no more than 183 days in the tax year, an employer not resident in the State where the work is performed, and remuneration not borne by a permanent establishment in that State.

Entrepreneurs also need to understand the concept of a permanent establishment (Article 5): a fixed place of business through which a company carries on all or part of its activity in the other State, such as a place of management, a branch or an office. A building site constitutes one only if it lasts more than six months. A dependent agent with authority to conclude contracts in the company's name may also create one.

Where a permanent establishment exists, the profits attributable to it are taxable in the State where it is located, under Mauritian or French corporate income tax as the case may be (Article 7). Otherwise, profits remain taxable only in the company's State of residence.

The BEPS framework and its effects on the France-Mauritius treaty

The France-Mauritius treaty can no longer be read in isolation. France and Mauritius have both listed it as a "covered tax agreement" under the OECD Multilateral Instrument (MLI), which stems from the work on base erosion and profit shifting (BEPS). The MLI entered into force on 1 January 2019 for France and on 1 February 2020 for Mauritius. On the French side, it applies to withholding taxes where the taxable event occurs on or after 1 January 2021, and to other taxes for periods beginning on or after 1 August 2020.

In practice, the MLI amends the treaty on several points:

• a new anti-abuse preamble;
• the option to approach the competent authority of either State under the mutual agreement procedure;
• an obligation to make corresponding transfer pricing adjustments;
• mandatory arbitration where the mutual agreement procedure fails within three years, subject to each State's reservations;
• above all, a general anti-abuse clause, the Principal Purpose Test.

The Principal Purpose Test (PPT)

Under the Principal Purpose Test, the tax authorities may deny a treaty benefit (reduced withholding rate, exemption, tax credit) if it is reasonable to conclude that obtaining that benefit was one of the principal purposes of an arrangement or transaction. It need not be the only purpose. The benefit is still granted if the taxpayer establishes that granting it would be in line with the object and purpose of the treaty. In practice, the taxpayer must show that the structure has a genuine business rationale and sufficient substance.

Impact on international tax planning

This shift reshapes the international tax planning long associated with Mauritius, a popular platform for structuring investment into Africa and Asia. Purely artificial structures are now exposed. For its part, Mauritius has strengthened its framework: it left the FATF grey list at the end of 2021, then the EU list of high-risk third countries for money laundering in 2022. Since July 2025 it has also applied a qualified domestic minimum top-up tax (QDMTT) to multinational groups under the OECD's Pillar Two.

The Mauritian tax landscape in 2025-2026

Any comparison between the two systems must take recent Mauritian reforms into account. Since 1 July 2025, personal income tax has followed a progressive scale: 0% up to Rs 500,000, 10% up to Rs 1 million and 20% above that. A 15% "Fair Share Contribution" has also applied to high earners with income above Rs 12 million, dividends included.

The 2026-2027 Budget, presented in June 2026, provides for replacing that contribution with a 35% tax band on chargeable income above Rs 12 million. It also launches a reform of Mauritian pensions from 2027. These measures should be checked against the final version enacted in the Finance Act. Mauritian taxation remains moderate for most taxpayers, but the idea of a uniform "15% tax" is out of date.

Inheritance tax and the France-Mauritius treaty

No inheritance tax treaty

The France-Mauritius treaty covers taxes on income and on capital, but not inheritance tax or gift tax. No specific treaty on these matters exists between the two States, so each applies its own legislation.

Consequences for Franco-Mauritian estates

In practice, the risk is not double taxation. Mauritius levies no inheritance or gift tax, and the transfer of property to heirs is exempt from land transfer tax and registration duty there. The real issue is the reach of French inheritance tax, set by Article 750 ter of the French General Tax Code:

• if the deceased was tax-domiciled in France, all of his or her assets, including Mauritian assets, are taxable in France;
• if the heir is domiciled in France and has been for at least six of the last ten years, all assets he or she receives are taxable in France, even if the deceased lived in Mauritius;
• in all other cases, only assets located in France are taxable in France.

Civil law rules also apply: Mauritian law provides for forced heirship, which must be coordinated with any will and with the law governing the estate.

Several planning options are available:

• life insurance, whose tax treatment depends on the residence of the policyholder and the beneficiaries;
• lifetime gifts, taking into account the residence rules above;
• structuring assets through French property-holding companies (sociétés civiles), trusts or foundations, with care given French reporting obligations and the PPT;
• using a notary who specialises in Franco-Mauritian cross-border estates.

Practical formalities for claiming treaty benefits

To obtain treaty benefits in practice, taxpayers must prove their tax residence to the tax authorities of the State paying the income. This step is a precondition for reduced withholding rates and the elimination of double taxation.

French-source income received by a Mauritian resident

A Mauritian resident receiving French-source dividends, interest or royalties must provide the paying institution with Form 5000 (certificate of residence), available on impots.gouv.fr. The section reserved for the foreign tax authority must be certified by the MRA. If the form is submitted before payment, the treaty rate applies directly. Otherwise, a refund claim must be filed with Form 5001 (dividends), 5002 (interest) or 5003 (royalties). A separate form is required for each type of income and each paying institution.

Dealing with the Mauritius Revenue Authority

In Mauritius, the Mauritius Revenue Authority (MRA) issues Tax Residence Certificates under the Income Tax Act 1995. The 2026-2027 Budget raised the fee to MUR 2,000 for individuals. To secure your position, you should:

• gather supporting documents: passport, proof of address and of presence in Mauritius, Mauritian tax returns, employment or lease contracts;
• apply to the MRA for the certificate well before the relevant income is paid;
• have the MRA certify any foreign forms required, such as French Form 5000, and keep a copy;
• for a French resident, obtain a French certificate of tax residence from the local tax office where needed, in particular to claim treaty rates on Mauritian-source income.

France and Mauritius exchange information on request under Article 27 of the treaty, and automatically exchange financial account information under the OECD Common Reporting Standard (CRS). Full consistency between the returns filed in each country is therefore essential.

Frequently asked questions

Conclusion

The France-Mauritius tax treaty is a robust legal tool for organising your international tax affairs, provided you master its finer points. The key points are tax residence under Article 4, the interplay between exemption and tax credit under Article 24, and the withholding tax caps, which in practice only concern dividends and royalties. Added to these are the taxation of real estate in the State where it is located, the continued French taxation of social security pensions and the anti-abuse clause introduced by the BEPS Multilateral Instrument. Finally, the absence of rules on inheritance calls for specific planning under French law.

As every situation is unique, we strongly recommend having your analysis reviewed by a tax lawyer or a wealth adviser specialising in Franco-Mauritian taxation before making any decision on relocation, investment or estate planning.