Transfer Pricing in Mauritius: Are you ready for the new documentation era?

What has changed with the Finance Act 2025?

The Finance Act 2025 amends section 75 of the Income Tax Act to require taxpayers engaged in controlled transactions to "prepare and keep transfer pricing records, as may be prescribed.”

This reform moves Mauritius from principle to practice. Companies must now be able to prove that their transfer pricing policies align with the arm’s length standard. Regulations will soon specify the exact format, thresholds and filing requirements, but expectations are clear: OECD-style documentation will become the norm, with a Master File and Local File supported by functional and economic analyses.

Who is concerned, and what must be documented?

The rules apply broadly to all Mauritian companies and branches involved in cross-border related-party transactions.

The scope is wide:

• supply of goods and services,
• royalties and licensing of intellectual property,
• intra-group loans and guarantees, and
• management fees and other arrangements.

At the heart of the reform lies the arm’s length principle: transactions must be priced as if they were concluded between independent parties under comparable circumstances. Documentation will need to clearly demonstrate this alignment.

Risks of non-compliance

While specific transfer pricing penalties will be detailed in forthcoming regulations, non-compliance already exposes businesses to tax adjustments, additional liabilities and penalties under the Income Tax Act.

The Mauritius Revenue Authority (“MRA”) will have increased scope to challenge transfer pricing positions. Although the Director-General of the MRA may waive penalties where a taxpayer demonstrates “reasonable cause,” this should not be relied upon. The safest strategy is to prepare robust documentation upfront.

What businesses should do now

To prepare, companies should:

• Map related-party transactions: identify all cross-border dealings involving Mauritian entities.
• Develop Master File and Local File content: align with OECD guidance, covering global structure, value chain and local entity analysis.
• Perform functional and economic analyses: support policies with benchmarking and contemporaneous documentation.
• Set up governance processes: review and update documentation annually, ensuring readiness for MRA audits.

Far from being a mere compliance burden, robust documentation reduces the risk of costly disputes, enhances transparency, and builds investor and stakeholder confidence.

The introduction of documentation requirements signals a new era of tax transparency in Mauritius. For multinationals, it is both a challenge and an opportunity: a challenge because the MRA will expect greater rigor, but an opportunity to strengthen governance and credibility in an increasingly competitive global landscape.

Now is the time to act. By anticipating requirements and aligning with international best practices, businesses can safeguard their tax positions and avoid unnecessary disputes.

Contact our experts for more information:

Roomesh Ramchurn, Mauritius Tax Partner

Charl Hall, South Africa Tax Director