Corporate Climate Responsibility (CCR) Levy in Mauritius: Introduction, Key Provisions and Latest Updates

The levy was subsequently enacted through the Finance (Miscellaneous Provisions) Act 2024, which was gazetted on 27 July 2024, bringing the measure into force under the Mauritian tax framework. The Government stated that revenue collected from the levy would support environmental protection, ecosystem restoration and climate-related projects through a newly established Climate and Sustainability Fund (CSF).

Legislative Background

The CCR Levy was announced in the Mauritian Budget 2024/25 on 7 June 2024 and was subsequently enacted through the Finance (Miscellaneous Provisions) Act 2024, which amended the Income Tax Act. The levy was introduced to help fund the country's growing climate adaptation and mitigation needs. Revenue collected from the levy is directed to the newly established Climate and Sustainability Fund (CSF) to support environmental and sustainability projects.

Rate of Levy

• The Corporate Climate Responsibility (CCR) Levy is charged at 2% of a company's chargeable income.
• It is based on chargeable income calculated under the Income Tax Act, not on accounting profit or turnover.
• Exempt income is generally excluded from the levy calculation.

Effective Date

• Applies from the Year of Assessment beginning 1 July 2024 and for subsequent years.
• Eligible entities must account for the levy when preparing their income tax returns.

Turnover Threshold

• The levy applies only to companies with turnover exceeding MUR 50 million for the relevant year of assessment.
• Companies with turnover equal to MUR 50 million or below are exempt.

Definition of Turnover

• Turnover means gross income from all sources, including exempt income.
• Therefore, income that is not ultimately taxable may still be considered when determining whether the MUR 50 million threshold is met.

Entities Subject to the  CCR Levy applies to a wide range of entities, including:

• Domestic companies
• Global Business Companies (GBCs)
• Sociétés
• Limited partnerships treated as companies
• Protected Cell Companies (PCCs)
• Variable Capital Companies (VCCs)
• Foundations
• Certain trusts and unit trust arrangements

A company or qualifying entity is required to pay a CCR Levy of 2% on its chargeable income, effective from the 2024/25 Year of Assessment onwards. No CCR Levy is payable by a company with respect to a year of assessment, where the turnover of the company for that year of assessment does not exceed MUR50 million. The rules apply broadly across both domestic and financial services sector structures.

Computation of the CCR Levy

The computation follows three key steps:

Step 1: Determine Turnover

Assess whether the entity's gross income from all sources, including exempt income,  exceeds MUR 50 million.

Step 2: Calculate Chargeable Income

Determine the chargeable income in accordance with the Income Tax Act after considering allowable deductions and tax adjustments.

Step 3: Apply the Levy Rate

CCR Levy = 2% × Chargeable Income.

Example

Calculation

CCR Levy = 20,000,000 × 2%

CCR Levy = MUR 400,000

Accordingly, the company would be required to pay a CCR Levy of MUR 400,000, generally alongside its annual income tax obligations.

Impact on Effective Tax Rates

One of the most significant consequences of the CCR Levy is its effect on the overall effective tax burden of affected taxpayers.

Industry analysis have highlighted the following impacts:

These increases arise because the CCR Levy represents an additional 2% charge on chargeable income and is imposed separately from the standard income tax liability. The actual impact will depend on each taxpayer's circumstances, including any available foreign tax credits or treaty relief.

Impact on companies following changes in CCR in the Finance Act 2026

The Finance Act 2026 changes are particularly important for Mauritian companies that derive foreign-source income and traditionally rely on foreign withholding tax (WHT) credits to reduce their Mauritius tax liabilities. While the amendments do not change the 2% Corporate Climate Responsibility (CCR) Levy rate, they significantly affect how foreign tax credits can be used and may increase the effective tax burden for certain structures.

The CCR Levy is imposed at 2% of a company's chargeable income. Before the Finance Act 2026 amendments, companies were generally focused on whether foreign tax credits could reduce their overall Mauritius tax exposure. The 2026 amendments now expressly provide that tax credits cannot be used to offset the CCR Levy, except for:

• Manufacturing investment tax credits; and
• Tax credits available under a Double Taxation Agreement (DTA).

As a result, the tax treatment differs depending on whether the foreign income arises from a treaty country or a non-treaty country.

Impact on companies receiving foreign dividends, interest or royalties

Many Mauritian companies, particularly Global Business Companies (GBCs), receive:

• Foreign dividends;
• Foreign interest income;
• Foreign royalty income; or
• Other passive income streams.

Such income is often subject to foreign withholding tax before being remitted to Mauritius. Under the normal Mauritius tax system, these foreign taxes may typically be claimed as a foreign tax credit against the 15% corporate income tax liability.

The issue now is whether the same credit can reduce the additional 2% CCR Levy.

Scenario 1: Income from a Treaty Country (DTA Available)

Where the foreign tax arises in a country with which Mauritius has a Double Taxation Agreement, treaty-based foreign tax credits remain available and may continue to provide relief against the CCR Levy, depending on the specific treaty provisions and the amount of foreign tax suffered. 

Example

Assume:

• Foreign dividend income: MUR 300 million
• Mauritian chargeable income: MUR 100 million
• Corporate tax at 15%: MUR 15 million
• CCR Levy at 2%: MUR 2 million
• Foreign withholding tax suffered: MUR 17 million
• Treaty exists

Potential outcome:

In such a case, sufficient treaty-recognised foreign taxes may effectively eliminate both the corporate income tax and the CCR Levy. However, the position depends on the wording and limitation provisions of the relevant treaty.

Scenario 2: Income from a Non-Treaty Country

This is where the Finance Act creates the most significant impact.

Where foreign income is received from a jurisdiction that does not have a DTA with Mauritius:

• Foreign tax credits may still reduce the normal corporate income tax liability.
• Those credits cannot be used against the CCR Levy.
• The CCR Levy therefore becomes an additional, unrecoverable tax cost.

Example

Assume:

• Chargeable income: MUR 100 million
• Corporate tax: MUR 15 million
• CCR Levy: MUR 2 million
• Foreign WHT credit: MUR 30 million
• No DTA

Outcome:

Prior to the amendment, the company may have expected little or no Mauritian tax leakage. Following the amendment, the company faces an unavoidable MUR 2 million CCR cost.

Increase in Effective Tax Rate

One of the most important consequences is the creation of a minimum Mauritius tax cost in situations where foreign tax credits previously eliminated Mauritian taxes entirely.

According to commentary on the Finance Act, where no treaty relief exists, the amendments may effectively increase the minimum tax burden in Mauritius from 0% to 2% of chargeable income.

For example:

This could materially affect:

• Holding companies;
• Investment platforms;
• Private equity structures;
• Family office structures; and
• International financing companies.

Cash Flow Impact Through APS

The Finance Act has also changed the collection mechanism of the Corporate Climate Responsibility (CCR) Levy. Companies that are subject to the Advance Payment System (APS) are now required to pay the levy through quarterly instalments, as follows:

• First APS statement: 25% of the CCR Levy
• Second APS statement: 25% of the CCR Levy
• Third APS statement: 25% of the CCR Levy
• Balance payable with the annual income tax return: 25% of the CCR Levy

As a result, the 2% CCR Levy is no longer settled solely at year-end but is instead paid progressively throughout the tax year.

Transitional relief

To mitigate the immediate cash flow impact of the new payment regime, a phased transitional relief applies to CCR Levy amounts payable under APS:

• 75% reduction for APS statements due between 1 July 2026 and 30 June 2027
• 50% reduction for APS statements due between 1 July 2027 and 30 June 2028
• 25% reduction for APS statements due between 1 July 2028 and 30 June 2029

Tax credits and relief

Taxpayers deriving income from jurisdictions with which Mauritius has a Double Taxation Agreement (DTA) may claim a credit for foreign taxes paid when calculating their CCR Levy liability, thereby reducing the risk of double taxation.

Working Capital Impact

Although the transitional relief provides some short-term support, companies will nevertheless be required to finance the levy throughout the year rather than settling it only after year-end.

For groups with substantial foreign-source income, this may create a significant working capital impact because:

• Cash outflows occur earlier in the tax cycle.
• Foreign tax credit positions may only be finalised after the relevant foreign tax assessments are completed.
• Any overpayments resulting from subsequent foreign tax credit claims may lead to refund positions, with recovery potentially taking time.

Accordingly, businesses may need to reassess their cash flow forecasting and tax provisioning processes to manage the accelerated payment timeline effectively.

Strategic considerations for Mauritian companies

Companies that benefit from WHT credits should now review:

1. Treaty Network Utilisation

Income sourced from treaty jurisdictions may continue to benefit from credits against the CCR Levy. Therefore, the existence and quality of the applicable DTA become more important than before.

2. Effective Tax Rate Modelling

Groups should recalculate projected effective tax rates to determine whether previously available foreign tax credits will remain fully usable after the CCR restrictions.

3. Cash Flow Forecasting

APS quarterly CCR payments may increase financing needs and affect treasury management.

4. Investment Structure Review

Structures holding investments in non-treaty jurisdictions may experience a permanent increase in tax leakage due to the inability to offset the CCR Levy using foreign WHT credits.

Opinion

The Finance Act 2026 materially restricts the use of foreign tax credits against the Corporate Climate Responsibility Levy. While treaty-based foreign tax credits remain available where permitted under an applicable Double Taxation Agreement, non-treaty foreign withholding tax credits can no longer be utilised to offset the 2% CCR Levy. Consequently, companies deriving foreign-source income from jurisdictions without treaty protection may face an irrecoverable additional tax cost of up to 2% of chargeable income, together with earlier cash outflows resulting from the introduction of quarterly APS payments of the levy.