For French entrepreneurs considering relocating to Mauritius, or for directors already on the island looking to repatriate profits, distribute dividends, or simply understand how their income will be taxed: the France-Mauritius tax treaty is the reference document. Not the average blog post, not your neighbour’s expat advice: the official bilateral text that overrides domestic law when it comes to cross-border taxation.
This guide is built for entrepreneurs, freelancers and company directors who want to understand precisely what the 2026 treaty provides, how it applies to their situation, and where the pitfalls lie. We cite the actual treaty articles, the real withholding tax rates, the official procedures (Tax Residence Certificate from the MRA, application for treaty benefits with French tax authorities) and we illustrate with worked numerical examples.
YMYL disclaimer: this content is informational and not personalised tax advice. International taxation depends on your individual situation. For concrete application to your case, consult a qualified French tax lawyer and a Mauritian accountant registered with the MIPA (Mauritius Institute of Professional Accountants). Our firm supports French-speaking entrepreneurs in this structuring, relying on certified Mauritian partners.
Key takeaways
- The France-Mauritius treaty has been in force since 11 December 1980, amended by a protocol in 2011 (anti-abuse), and integrated into the OECD Multilateral Instrument (MLI), BEPS Action 6 since 2018.
- It caps withholding tax rates at source: 5% on dividends (subject to holding threshold), 0% internally in most cases (interest, subject to conditions), with a French tax credit mechanism to eliminate double taxation.
- Applying treaty rates requires a Tax Residence Certificate (TRC) issued by the Mauritius Revenue Authority, presented to the French administration.
- Since 2018, the anti-abuse clause (Principal Purpose Test) under BEPS Action 6 lets the French administration deny treaty benefits if a structure lacks real economic substance.
- Capital gains on the sale of shares of Mauritian companies are in principle taxable only in Mauritius (0% capital gains tax on movables), except for property-rich companies.
1. Why this treaty matters to you
If you are a French tax resident and you hold shares in a Mauritian company (or vice versa), two States in principle claim the right to tax your income. France because it considers you resident; Mauritius because the company has its seat there. Without a bilateral agreement, you would be taxed twice on the same euro of profit, which would make any international structuring economically absurd.
A double tax treaty (DTT) does exactly this: allocate the right to tax between the two States and ensure the same income is not hit twice. It covers personal and corporate income tax, plus equivalent levies.
In practice, for an entrepreneur setting up in Mauritius or structuring part of their activity via Mauritius, the treaty determines:
- How Mauritian company income (dividends, director salary) is taxed when repatriated to France.
- At which rate Mauritius may withhold on dividends paid to a French resident (and vice versa).
- Whether a future sale of Mauritian company shares will be taxable in France or in Mauritius.
- How to avoid the permanent establishment trap: if despite Mauritian residence, the activity is actually run from France, profits may be reclassified as taxable in France.
It’s much more than an administrative detail, the treaty directly conditions the economic viability of your structure.
2. Scope: who is covered?
Covered persons
The treaty applies to persons (individuals or entities) who are tax residents of one of the two contracting States (Article 1). The concept of resident is defined in Article 4 and refers to each country’s domestic law: a resident is someone subject to tax there by reason of domicile, residence, place of management, or any similar criterion.
If you are simultaneously resident in both States (a common situation for entrepreneur directors: home in France but company run from Mauritius), tie-breaker rules apply in order:
- Permanent home
- Centre of vital interests (personal and economic ties)
- Habitual abode
- Nationality
- Failing that, mutual agreement between administrations
These criteria are fundamental. In practice, you do not become a Mauritian tax resident simply by setting up a company in Mauritius. You must effectively transfer your economic and personal life. Otherwise you remain a French resident, taxable in France on your worldwide income.
Covered taxes
On the French side: income tax (IR), corporate tax (IS), social contributions on capital income. On the Mauritian side: Income Tax on companies and individuals.
Important: the treaty does not cover VAT, registration duties, or French social security contributions (CSG/CRDS), these remain due in France under domestic rules, even if you benefit from the treaty on income tax. A classic trap for expats who discover they still owe CSG on certain capital income.
3. Tax residence and the Tax Residence Certificate (TRC)
Why the TRC is central
For a Mauritian company or person to benefit from the treaty’s reduced rates, it must prove to the French administration that it is genuinely a Mauritian tax resident. This proof is the Tax Residence Certificate, officially issued by the Mauritius Revenue Authority (MRA).
Without a valid TRC, French authorities apply the domestic withholding rates:
- 25% on dividends paid to a non-resident (Article 119 bis of the French Tax Code)
- 26.5% on interest in some cases
- 33.33% on certain royalties
With a valid TRC, these rates fall to the treaty levels (5% or 15% for dividends, see section 4).
How to obtain the TRC in Mauritius
The procedure is with the MRA:
- Application form: “Application for Tax Residence Certificate” available on the MRA website (
mra.mu). - Supporting documents: company by-laws, Certificate of Incorporation, evidence of tax residence (Certificate of Tax Residency), latest annual accounts, evidence of economic substance (premises, employees, board meetings held in Mauritius).
- Processing time: typically 4 to 8 weeks.
- Cost: modest administrative fee.
- Validity: annual. Must be renewed each year.
⚠️ Substance required: since 2019 and tightened FSC (Financial Services Commission) requirements, Mauritius no longer issues TRCs to “letterbox” companies. For Global Business Companies (GBC), real economic substance criteria are required (at least 2 Mauritius-resident directors, minimum operational expenditure, employees, premises). A structure without substance will be refused a TRC, and therefore the treaty.
4. Withholding tax rates under the treaty
This is the part most entrepreneurs care about most concretely. Here are the rates applicable under the France-Mauritius treaty (subject to valid TRC and absence of abuse).
Dividends (Article 10)
| Situation | Maximum withholding rate at source |
|---|---|
| Recipient holds ≥ 10% of the distributing company’s capital | 5% |
| All other cases (individuals, minority holdings) | 15% |
Comparison with domestic law:
- Without the treaty, France would apply 25% to a dividend paid to a non-resident.
- With the treaty, the rate falls to 5% or 15%.
On the Mauritian side: the Mauritius Income Tax Act provides for no withholding tax on dividends paid by a Mauritian company, including to non-residents. The treaty therefore caps a right that Mauritius does not exercise in practice for outbound dividends.
Interest (Article 11)
Interest is in principle taxable in the recipient’s State of residence. A maximum source-state withholding tax may apply (in practice often reduced to 0% between France and Mauritius in most situations, subject to strict beneficial ownership conditions).
Royalties and intellectual property (Article 12)
Royalties received by a resident of one State for use of patents, trademarks, copyrights, software, etc. from the other State are generally taxable only in the recipient’s State, with a capped source-state withholding. For e-commerce or SaaS structures that license their IP via a Mauritian holding, this is one of the treaty’s most tangible benefits.
⚠️ But it’s also the most closely watched point by the French administration under abuse-of-law rules (see section 7).
Tax credit in France (eliminating double taxation)
When a French resident receives dividends or royalties from Mauritius and a withholding has been levied in Mauritius (5% or 15%), France grants a tax credit equal to the Mauritian withholding, capped at the corresponding French tax. The income is taxed in France at the PFU (30%) or at progressive rates on option, with deduction of the tax credit.
Concretely: if you receive €100,000 in dividends from your Mauritian company and Mauritius withholds 5% (€5,000), France taxes the €100,000 at the 30% PFU (€30,000) and deducts the €5,000 credit → balance owed in France: €25,000. Total tax burden: €30,000 (30%).
Without the treaty: €25,000 French withholding + €30,000 PFU = €55,000 (55%). The treaty saves you €25,000.
5. Capital gains and share sales (Article 13)
Article 13 governs the taxation of capital gains. The general rule: gains on the sale of movable property (including shares) are taxable only in the seller’s State of residence.
Concretely, if you are a Mauritian tax resident and sell shares in a Mauritian company:
- Taxation only in Mauritius → 0% (Mauritius has no capital gains tax on movables).
- France cannot tax that gain (with exceptions below).
Important exceptions:
- Property-rich companies: if more than 50% of the share value derives from French real estate, the gain remains taxable in France.
- French exit tax: if you transfer your tax residence from France to Mauritius and you hold more than €800,000 of qualifying participations, France may apply an exit tax (Article 167 bis of the French Tax Code), unless deferred payment with guarantees.
For an entrepreneur anticipating a future sale, structuring the sale from Mauritius after an effective transfer of residence can represent major savings, but it isn’t improvised, and the timing (between residence transfer and sale) must be planned with a tax specialist.
6. Permanent establishment: the effective management trap
This is the main risk for an entrepreneur creating a Mauritian company without effectively transferring their activity.
Article 5 defines permanent establishment (PE): a fixed place of business through which an enterprise carries on its activity. A place of management, branch, office, factory or workshop are PEs.
Why it’s critical: if the French administration considers that your Mauritian company actually has a PE in France (e.g. because you take all strategic decisions from Paris, with offices and staff there), then the Mauritian company’s profit becomes taxable in France to the extent attributable to that PE.
Criteria the French administration looks at:
- Where are board meetings / general meetings held?
- Where are strategic decisions taken?
- Where does the effective director reside?
- What real economic substance exists in Mauritius (staff, premises, expenditure)?
- Are there offices or collaborators in France?
Our recommendation: if your activity is essentially run from France, don’t set up a Mauritian structure just for tax, you risk a major reassessment. Mauritius makes tax sense only if you genuinely transfer your activity, or structure an international flow where Mauritius brings real substance (local team, partners, clients).
7. Anti-abuse clause: the Principal Purpose Test (PPT)
Since the Multilateral Instrument (MLI) BEPS Action 6 entered into force in 2018 (applied to France and Mauritius by decree in 2019), the France-Mauritius treaty integrates an anti-abuse clause known as the Principal Purpose Test (PPT).
The PPT allows administrations to deny treaty benefits (reduced withholding rates in particular) if they consider that obtaining that tax benefit was one of the principal purposes of an arrangement or transaction, and that the benefit would be contrary to the object and purpose of the treaty.
In practice, the French administration examines:
- The real economic substance of the Mauritian company
- The existence of real commercial operations (clients, suppliers, employees)
- The economic logic of the structure (beyond the mere tax benefit)
- The history and consistency of the strategy
A “conduit” company without real activity, set up just before dividend or royalty payments, with obvious intent to capture treaty benefits → PPT triggered, domestic rates (25%) re-applied, potentially with penalties.
This is why economic substance is non-negotiable for a Mauritian structure that wants to withstand an audit. It is no longer a “nice to have”, it’s a sine qua non condition.
8. Three worked examples
Example 1: Consultant freelancer relocated to Mauritius
Situation: Pierre, 35, strategy consultant. Generates €180,000 revenue via a French SAS, pays ~€70,000 in income tax + social contributions. Decides to relocate to Mauritius effectively and transfer his activity (mostly non-French clients).
Structure:
- Domestic Company in Mauritius (corporate tax: 15%)
- Pierre transfers residence: becomes Mauritian resident (> 183 days/year + vital interests in Mauritius)
- Obtains his TRC
Year 1 taxation:
- Mauritian company revenue: €180,000
- Pierre’s salary: €60,000 (taxed in Mauritius: ~€9,000)
- Taxable profit in Mauritius: €120,000 → 15% IS = €18,000
- Net profit: €102,000 → dividend to Pierre (Mauritian resident): 0% in Mauritius
- Total tax burden: ~€27,000 (vs ~€70,000 before)
- Annual saving: ~€43,000
⚠️ Condition: real residence transfer and real substance.
Example 2: French e-commerce with Mauritius “holding” (PPT triggered)
Situation: Sophie, e-commerce operator, lives in France and runs her online shop via a SARL. Sets up a “holding” in Mauritius to which she sells her trademark rights, and the French SARL pays €8,000/month in royalties to the Mauritian holding.
Risk:
- Sophie is a French tax resident (lives in France 12 months/year)
- The Mauritian holding has no substance (no employee, no offices, no real activity)
- Royalties are paid almost exclusively to optimise tax
Likely outcome:
- French administration triggers the PPT → treaty benefits denied
- Domestic withholding rate (33.33% on royalties) applied
- Risk of abuse-of-law assessment (Article L. 64 of the LPF) with 80% penalty
- Risk of PE qualification in France
Real saving for Sophie: negative → likely reassessment.
Example 3: Future sale of shares from Mauritius
Situation: Marc set up a SaaS 8 years ago, valued at €2M. Lives in France. Anticipates a sale in 3-4 years. Transfers residence to Mauritius 2 years before sale, structures correctly (substance, TRC, planned exit tax).
Sale (4 years later, as Mauritian resident):
- Capital gain: €1.8M
- Article 13: taxable only in Mauritius
- Mauritius: 0% on movable capital gain
- Saving vs sale as French resident: ~€540,000 of PFU
⚠️ Strict conditions: exit tax to anticipate, waiting period often recommended between residence transfer and sale, real substance throughout.
9. Five most common pitfalls
- Fake residence transfer: creating a Mauritian company but continuing to live, work and decide from France. Risk: residence reclassification + PE + abuse of law.
- Substance-less company: no employee, no premises, no real operations. Risk: TRC refusal + PPT triggered.
- Forgetting CSG/CRDS: the treaty covers IR, not social contributions. On certain income types, CSG remains due in France.
- Not anticipating exit tax: for holders of significant participations (> €800,000), exit tax may apply at residence transfer. Deferral possible but with guarantees.
- Not renewing the TRC: it’s annual. Without a current TRC, the French administration applies domestic rates.
10. How to put it into practice: recommended steps
- Preliminary tax audit by a French tax lawyer: identify risks (exit tax, abuse of law, social security) and opportunities.
- Choice of suitable Mauritian structure: Domestic Company, GBC, or Authorised Company depending on activity, revenue origin and client geography. See our GBC vs Domestic comparison.
- Mauritius incorporation with real substance from day one (local directors, IFRS accounting, board meetings held in Mauritius). See Create a company in Mauritius: complete guide.
- TRC application with the MRA after the first closed financial year.
- If personal residence transfer: Premium Visa or Occupation Permit, real transfer (housing, accounts, etc.). See Expatriation to Mauritius: entrepreneur guide.
- Coordination with administrations: declaration of residence transfer in France (form 2042), treaty application request for future flows.
- Annual follow-up: TRC renewal, substance maintenance, accounting up to date, filings in both countries.
Sources and official references
- Full text of the France-Mauritius tax treaty of 11 December 1980 and protocols: impots.gouv.fr : International treaties
- Mauritius Revenue Authority (MRA) : TRC procedure: mra.mu
- Income Tax Act of Mauritius: supremecourt.govmu.org
- Financial Services Commission (FSC) Mauritius, economic substance rules: fscmauritius.org
- OECD (Multilateral Instrument (MLI) BEPS Action 6): oecd.org/tax/treaties/multilateral-instrument
- French BOFiP (Official Tax Bulletin), tax treaties section: bofip.impots.gouv.fr
Article written by Quentin, founder of CAP Maurice. Last updated 26 May 2026. For any question about applying the treaty to your situation, book a free discovery call, we review your case in 30 minutes, no commitment.
