Foreign income taxation question...

Member since 06 October 2023

yellowwwwduckyNew member06 October 2023 14:59:19

Hello,

My wife and I are seriously considering relocating from Hong Kong. In Hong Kong, we pay no tax on interest income (eurobonds generally) or dividends (mostly gbp dividends and some usd/hkd ones). That makes retirement math easy - 100,000 usd of income across those sources makes for no tax on any of it.

I gather in Mauritius if you are resident (either by retirement visa or pds scheme or whathaveyou) you are taxed on worldwide income from all sources. That said, PWC specifically mentions "However, income derived from outside Mauritius is taxable only to the extent it is received in Mauritius".

So does this means if you make the forementioned 100k (for example to make math easy), if you bring in say 40,000 a year to spend on 'living expenses' you pay tax on that amount you remitted to your local bank account? That would make for a 15% (give or take based on the progressive Mauritius tax scale) tax bill on that 40,000 (so 6,000). That to me sounds more like a remittance tax basis rather than a global income tax basis on residency.

I gather capital gains are tax free but as retirees, capital gains are not guaranteed so we need to be more interest income/dividend income based to know we can afford to live - but then we also need to know the tax load on that income if any.

We have been about 5 weeks in total now in Mauritius and it seems a wonderful option.

okiwei New member

Member since 03 January 2023

okiweiNew member07 October 2023 07:21:29

@yellowwwwducky

Remittance basis taxation. If you need an apartment to rent, you can contact me as well .

yellowwwwducky New member

Member since 06 October 2023

yellowwwwduckyNew member07 October 2023 13:47:57

Remiitance is.....tolerable. The big gotcha would be if you came in as a retirement visa, rented for a while, found a place you liked in xyz and it was say 1 million, do you have to pay 15% tax on that 'remittance'. That would be a chunky number.

Pablo888 Serial expat

Member since 12 May 2023

Pablo888Serial expat28 October 2023 12:56:59

818

Sounds like the best advice here is to see a tax accountant. I am aware of US - Mauritius tax treaties. To get to the bottom of your tax planning situation, you may want to get expert advice on HK - Mauritus tax treaties - which I guess no-one will offer on an open posting channel.

Also, since you are mentioning a retirement visa, you may also want to get some immigration advice on how best to structure this piece too. I think that your situation is unique enough to warrant getting professionals to help.

Good luck.

Bamboozler Active member

Member since 13 November 2021

BamboozlerActive member18 August 2024 07:30:24

@yellowwwwducky

Did you find any further info on this? Many thanks in advance

zurtle Active member

Member since 07 July 2022

zurtleActive member18 August 2024 14:33:45

A few things:

On 40k USD, your tax will be more like 3900-4000 based on the MRA calculator

https://eservices.mra.mu/taxcalculator/viewCalculate

A lot of things like health insurance can be further deducted to reduce your taxable income. If your spouse is a "dependent" then you get to claim additional deductions from your taxable income.

If you do not remit your foreign dividends/interest income to Mauritius then it won't be taxed here. You can still spend that money using foreign debit/credit cards to pay for groceries/restaurants etc and it will be tax free. (Consider 1-2% forex charge to be the tax in this case)