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Article
Publication date: 9 November 2020

Ambareen Beebeejaun

While Mauritius is ranked as the fastest growing financial centre in Africa and the second-fastest-growing offshore financial centre (OFC) in the word by the New World…

Abstract

Purpose

While Mauritius is ranked as the fastest growing financial centre in Africa and the second-fastest-growing offshore financial centre (OFC) in the word by the New World Health in 2019, the country is facing severe allegations that it is progressing at the expense of other developing countries. In this respect, this paper aims to assess the contribution of the Mauritius OFC, the robustness of tax avoidance and evasion laws, the endeavours undertaken by the Mauritius Government to promote Mauritius OFC and the alleged classification of Mauritius as a tax haven.

Design/methodology/approach

To achieve the above research objectives, this paper will adopt the black letter approach. That is, the relevant legislation and case laws will be scrutinised. Also, books, journal articles, newspaper articles, reports from international bodies amongst others will be used. The research methodology also comprising a critical analysis which implies that existing studies conducted on the subject matter of this research will be assessed and the extent to which the researcher agrees with the existing work will be weighed.

Findings

Based on the critical analysis, this paper recommends that the Mauritius Income Tax Act be amended to provide for punitive and corrective actions for those engaged in impermissible tax avoidance. Additionally, for transparency and clarity, it is suggested that the Mauritius Revenue Authority (MRA) clarifies in a practice note the factors that it considers when determining the tax liability that should have been payable or when detecting tax avoidance cases. Similarly, to discourage tax evasion, the fines and penalties for tax-evading offences should be more strict and a regulatory framework for tax practitioners need to be set up.

Originality/value

To the author’s knowledge, this paper is amongst the first academic research that emphasises the position of Mauritius as an OFC and critically analysed the related laws relating to the financial world.

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Article
Publication date: 2 November 2020

Ambareen Beebeejaun

The purpose of this paper is to analyze the Double Irish and Dutch Sandwich (DIDS) tax schemes used by international companies. Companies using these schemes are enabled…

Abstract

Purpose

The purpose of this paper is to analyze the Double Irish and Dutch Sandwich (DIDS) tax schemes used by international companies. Companies using these schemes are enabled to transfer a large amount of their profits to offshore tax havens by using wholly owned subsidiaries located in Ireland and the Netherlands. This paper also analyzes the US General Anti-Avoidance Rule (GAAR) to see whether it can effectively detect and counteract this scheme. This analysis is furthermore enhanced by applying the Mauritian GAAR through Section 90 of the Income Tax Act to the said schemes.

Design/methodology/approach

Concerning research methods, the library and the internet will be the main sources of information to be used for this paper. Through the usage of library research, the Mauritian Income Tax Act, US GAAR, European Commission decisions and scholar writings will further enhance this paper on the structure and preventive actions that can be taken against the DIDS scheme. This paper will also use a case study coupled with a theoretical analysis of current anti-avoidance rules.

Findings

The paper then concludes that it is possible to counteract the schemes using the Mauritian law but under specific circumstances. It is then revealed that there is a fundamental flaw in the current tax systems, which is the inability to regulate the intangible nature of resources and technology-based transactions.

Originality/value

To the author's knowledge, this paper is among the first literature on the subject of DIDS strategies conducted in the context of Mauritius.

Details

Journal of Money Laundering Control, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1368-5201

Keywords

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Article
Publication date: 26 November 2020

Ambareen Beebeejaun

The corporate veil or veil of incorporation is a legal concept that separates the legal and juristic personality of a company from its members, directors and other…

Abstract

Purpose

The corporate veil or veil of incorporation is a legal concept that separates the legal and juristic personality of a company from its members, directors and other stakeholders. Indeed, common law has provided for numerous circumstances in which the corporate veil of a company may be lifted, and courts rely on these case law precedents to determine the grounds for lifting the corporate veil. However, there is limited case law regarding environmental torts as a ground for lifting the veil of incorporation and there is no legal provision in Mauritius which recognises environmental crimes as an exception to corporate veil. Consequently, this paper aims to discuss the liability of decision-makers of a company in the case of corporate environmental wrongdoings and thereafter, to present a case for amending Mauritius laws to give recognition to environmental torts as a ground of lifting the corporate veil.

Design/methodology/approach

This paper has adopted the black-letter approach and the comparative research methodology. The laws of Mauritius on corporate veil will be compared to the related laws of the USA and Canada with the view of seeking recommendations for Mauritius, as these countries are known to have an extensive legal framework on environmental crimes as a ground to lift the corporate veil.

Findings

It is concluded that it is high time for Mauritius to adopt a separate manslaughter law that would incorporate crimes committed to the environment by corporate bodies as a ground for lifting the corporate veil and thereby attacking individual stakeholders concerned.

Originality/value

This study is among the first researches conducted in the field of environmental torts as a ground for lifting the corporate veil in Mauritius.

Details

Journal of Financial Crime, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1359-0790

Keywords

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Article
Publication date: 14 October 2020

Ambareen Beebeejaun

Value added tax (VAT) is an indirect tax that is payable upon the consumption of goods and services. Recently, the Government of Mauritius has introduced a new set of…

Abstract

Purpose

Value added tax (VAT) is an indirect tax that is payable upon the consumption of goods and services. Recently, the Government of Mauritius has introduced a new set of rules to extend the VAT system to non-resident providers of electronic services to consumers based in Mauritius. The purpose of this research paper is therefore to assess the adequacy and efficiency of the recent VAT amendments in terms of compliance requirements and collection measures and to identify loopholes in the present legal provisions.

Design/methodology/approach

The methodologies for the research are in essence comprised of the black letter approach which will analyse the legal provisions relating to VAT in Mauritius. A comparative analysis will also be conducted to find out the corresponding legal provisions relating to VAT on digital services in South Africa.

Findings

This research paper has highlighted some recommendations inspired by the laws of South Africa and the Organisation for Economic Cooperation and Development Based Erosion Profiting Shifting action plan which may be of use to Mauritius stakeholders when devising regulations on the imposition of VAT on foreign suppliers of digital services under Section 14B of the VAT Act.

Originality/value

To the author's best knowledge, this research paper is the first study conducted in the field of indirect taxation of foreign suppliers of digital services to residents of Mauritius.

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Article
Publication date: 10 September 2018

Ambareen Beebeejaun

A taxpayer who gets caught under Part VII of the Mauritius Income Tax Act is subjected to a corrective measure only in the form of payment of the amount of tax that would…

Abstract

Purpose

A taxpayer who gets caught under Part VII of the Mauritius Income Tax Act is subjected to a corrective measure only in the form of payment of the amount of tax that would have been due in the absence of the avoidance arrangement, but the consequences set out in the same section do not result in any disincentive to the taxpayer that would ensure the prevention of the occurrence of such type of anti-avoidance practices in the future. This study aims to investigate the effectiveness of the anti-avoidance provisions in the Mauritius legislation as a weapon against impermissible tax avoidance, and the study also intends to critically analyse the remedies available against taxpayers who enter into impermissible tax avoidance transactions.

Design/methodology/approach

The methodology adopted for this qualitative study consists of a critical analysis and comparative legal review of the relevant legislation, case laws and literature. The anti-avoidance provisions of the Mauritius legislation will be compared with similar provisions of legislations of countries that have rigid preventive rules for anti-avoidance practices, and the selected countries are the UK and Australia because each country has been successful in diminishing the tax avoidances practices further to the imposition of penalties for impermissible tax avoidance. The black letter approach will also be used through which existing legal provisions, judicial doctrines, scholar articles and budget speeches governing anti-avoidance provisions for each country identified will be analysed.

Findings

Further to an analysis of the substantial differences between Mauritius anti-avoidance legal provisions and those of the UK and Australia, it is found that the backing of corrective actions by penalties act as a disincentive to prohibit impermissible anti-avoidance practices. The study concludes that, where there is abuse of law, the law needs to provide for penalties that must be suffered by the abuser, and hence, the study calls for an amendment in the Mauritius Income Tax Act to strengthen anti-avoidance provisions, by adopting similar provisions of the laws of Australia and the UK.

Originality/value

At present, there is no Mauritius literature on the researched topic, and this study will be one of the first academic writings on the subject of penalties for impermissible tax avoidance in Mauritius. The study is a new and unique topic in Mauritius, and for that reason, the study will largely rely on foreign sources that deal with penalties for impermissible tax avoidance, and this will include the Australian Taxation Administrative Act 1953, Australian case laws and the UK Finance Act 2016. This study is being carried out with the view to provide insightful recommendations to the stakeholders concerned in Mauritius to enhance the revenue collection avenues and methodologies for the Mauritius revenue authorities.

Details

International Journal of Law and Management, vol. 60 no. 5
Type: Research Article
ISSN: 1754-243X

Keywords

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Article
Publication date: 12 November 2018

Ambareen Beebeejaun

The purpose of this study is to critically analyse the concept of unfair dismissal and to assess the extent to which the Employment Rights Act 2008 is affording protection…

Abstract

Purpose

The purpose of this study is to critically analyse the concept of unfair dismissal and to assess the extent to which the Employment Rights Act 2008 is affording protection to employees in Mauritius. The purpose of this study is to also demonstrate that as employees form an integral part of their workplace, their employment cannot be terminated without substantive and procedural fairness. The paper will provide some recommendations to cater for loopholes in existing Mauritius employment legislations.

Design/Methodology/Approach

To critically examine the topic, the black letter approach is adopted to detail legislations and judgments of courts on the subject matter. A comparative analysis with some other jurisdictions’ employment legislations is also carried out to define, explain and examine the concepts of dismissal, substantive causes such as misconduct and procedural fairness.

Findings

From the methodologies used, it is found that a substantial reason is not sufficient to conclude whether a dismissal is fair. The law of unfair dismissal has introduced some procedural safeguards to protect the employee from being unfairly and unjustifiably dismissed. The procedural requirements act as guidelines to employers and if they are not followed properly, the dismissal will be unfair. Unfair dismissal needs to be accompanied by remedies from employers, and monetary compensation has been found to be the most appropriate remedy.

Originality/Value

This paper is amongst the first research work conducted in Mauritius that compares the law of unfair dismissal and its implications with the laws of England and South Africa. The study is carried out with a view to provide practical recommendations in this area of employment law to the relevant stakeholders concerned.

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Article
Publication date: 11 February 2019

Ambareen Beebeejaun

One of the most common forms of international tax avoidance is transfer pricing by multinational enterprises. The research will investigate on the factors that contribute…

Abstract

Purpose

One of the most common forms of international tax avoidance is transfer pricing by multinational enterprises. The research will investigate on the factors that contribute to transfer pricing abuses. At present, there is no substantial and extensive transfer pricing rule in Mauritius. This paper aims to analyse the legal approaches to tackle transfer pricing issues that are undertaken by some countries whose taxation regime is similar to Mauritius. The selected countries are South Africa and UK. The objective behind the comparative study is to come up with the appropriate preventive and corrective measures for Mauritius.

Design/methodology/approach

The methodology adopted for this research consists of a critical analysis and comparative legal review of the relevant legislation, case law and literature. A minor quantitative analysis of the transfer pricing problem in Mauritius will be conducted, in terms of which interviews will be conducted with officials from different institutions in Mauritius.

Findings

The study will conclude that the absence of explicit formal rules on transfer pricing allows businesses to use the country to manipulate transfer prices to avoid paying taxes. Therefore, an amendment to Mauritius laws and regulatory framework is required to dissuade multinationals to engage in transfer pricing abuses. The study will conclude that the scope and application of the arm’s length principle needs to be formally set out in legislation and also, the use of Advance Pricing Agreements will also be recommended.

Originality/value

The research is among the first studies that compare Mauritius legal provisions on transfer pricing with that of South Africa and UK. The research is unique as it intends to provide fruitful recommendation to stakeholders in Mauritius to enhance the existing legal framework on the subject.

Details

International Journal of Law and Management, vol. 61 no. 1
Type: Research Article
ISSN: 1754-243X

Keywords

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Article
Publication date: 12 February 2018

Ambareen Beebeejaun

The study aims to focus on the effectiveness of international investment agreements (IIAs) in helping or facilitating the influx of foreign direct investment (FDI) to host…

Abstract

Purpose

The study aims to focus on the effectiveness of international investment agreements (IIAs) in helping or facilitating the influx of foreign direct investment (FDI) to host developing countries.

Design/methodology/approach

To critically examine the topic, the black letter approach and the socio-legal analysis are adopted. The study has analysed how Mauritius, being a developing country, is responding to FDI needs from various bilateral and multilateral investment treaties concluded, and the research includes the analysis of official data publicly made available by the World Trade Organization, Organisation for Economic Co-operation and Development, International Monetary Fund and Mauritius governmental agencies’ reports.

Findings

From the methodologies used, it was found that other than IIAs, there are various key determinants which foreign investors consider prior to injecting their capital in developing countries in terms of environmental, social and cultural factors. Also, there are some inherent loopholes mostly in terms of monitoring, in the way IIAs are concluded and are applied in practice by and amongst signatory states.

Originality/value

This research is amongst the first studies to conclude the link between IIAs and FDI flows in developing countries with a particular focus on Mauritius. Additionally, an overwhelming number of studies have emphasised on the efforts to boost FDI, which are inspired mostly by action plans of developed nations, but this research will analyse the policy options adopted by China, being itself a developing country, and the extent to which such recommendations are applicable in the context of Mauritius will also be considered.

Details

International Journal of Law and Management, vol. 60 no. 1
Type: Research Article
ISSN: 1754-243X

Keywords

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Article
Publication date: 12 November 2018

Ambareen Beebeejaun and Jushveer Koobloll

“Shareholder activism works when shareholders understand something about the characteristics of the business that the board doesn’t”. As complex the term shareholder…

Abstract

Purpose

“Shareholder activism works when shareholders understand something about the characteristics of the business that the board doesn’t”. As complex the term shareholder activism may seem, it demonstrates a very simple phenomenon of how shareholder take control of a situation to turn it in their favor. The whole world has taken an activism “twist” where every person has a word to say. The same characteristic of the society is showcased in this paper where engagement of shareholder is questioned whether it helps to promote effective corporate governance. Given the fact that Mauritius has a rather low shareholder activism framework, this research aims to depict the international picture of the issue at different levels to reach a consensus with the local market. It was a major challenge as very little research has been conducted to accurately contrast shareholder activism with corporate governance. However, the international standards aim at giving a clear picture of how the shareholder activism actually functions.

Design/methodology/approach

The research has adopted a black letter approach by analyzing relevant laws and legislations governing corporate governance matters in Mauritius and the USA, Malaysia, France and South Africa. Thereafter, a comparative analysis was made between Mauritius laws and the aforementioned countries. Recommendations were then put forward on the subject matter which is shareholder activism.

Findings

Research has shown development in corporate governance alongside the increase in shareholder activism. However, these research studies fail to prove that the development is because of shareholder activism itself. In fact, it could be because of increase in corporate intellects, removal of trade barriers, sustainable corporate practices and many such changes that have affected the corporate market somehow. Hence, it is difficult to conclude, with certainty, that the driver of good corporate governance is, in particular, the phenomenon of shareholder activism. Nevertheless, many result of shareholder activism has demonstrated a rather positive impact on the ongoing of the corporate dealings and on a personal note, it can be said that shareholder activism is a domain where much research and development should be effected as it represents a promising improvement in the way corporations are governed.

Originality/value

The concept of shareholder activism is quite new to the Mauritius legislation. There has not been research done on whether shareholder activism, particularly, is the reason for corporate success or failure. In this light, this paper aims to analyze shareholder activism practices in other countries and puts forward recommendation in the Mauritius context which may be of use to stakeholders concerned.

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