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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.

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.

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.

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.

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.

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.

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.

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

Numerous policies are established in Mauritius to attract foreign direct investment, but at the same time, severe concerns were raised concerning the erosion of Mauritian tax base, which is witnessed by the decrease in the percentage of tax revenue to gross domestic product in recent years. To avoid these issues, in 2019, the Mauritian legislator has domesticated the Organisation for Economic Co-operation and Development (OECD) BEPS 2013 Action 3 on controlled foreign company (CFC) in its income tax legislation. As such, the purpose of this study is to critically assess the implications of CFC rules of Mauritius to reduce tax avoidance in the light of international tax competition.

To achieve the research objective, this study will adopt a black letter approach by analysing the rules and regulations of various jurisdiction as well as international standards on CFCs and other tax avoidance legal provisions. A comparative analysis will be conducted between Mauritian laws on CFCs and the corresponding legislation of the UK and the USA, which are selected to assess the developed world’s position on strict CFC rules.

A hasty implementation of CFC rules leads to various complexities like interpretation issues and diminishing the competitiveness of the country to multinationals. In this respect, there is the risk of a trade-off between tax collected and foreign direct investment in the country. Consequently, the research recommends that Mauritius reforms its CFC legislation by extending the scope of tax exemptions for intra-group financing income, for the first year of CFC’s operation with the possibility of offsetting foreign taxes and for the Mauritius Revenue Authority to establish detailed guidelines on the determination of CFC income and its attribution for tax purposes in Mauritius.

Existing literature has to a great extent focused on the role of CFC rules as a tax avoidance measure and on the divergence or convergence between domestic CFC legislation against the OECD recommendations (Dourado, 2015; Xu, 2018; Beebeejaun et al., 2023). However, limited literature is available on the evaluation of the purpose of CFC rules enacted by a developing country being Mauritius in the context of the global competitive market, to which this research aims at filling the gap.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

The purpose of this paper is to examine the existence of income shifting using the practice of transfer pricing (TP), not only in sales but also in purchase and management service transactions, in Asian developing countries. The paper also investigates the role of the specific anti-avoidance rules (SAAR) in preventing TP practices in various types of transaction.

The research employs panel data from a sample of 200 subsidiaries in ten countries over the period 2010–2014.

Different results were obtained from previous research on developed countries, which found that TP practice was proven in sales transactions. This study finds no evidence for TP practices in sales transactions, but that they do take place in purchase, management service fee and management services revenue transactions. The study also finds evidence that SAAR reduces the practice of TP in sales transactions.

The research investigates TP practices, not only those related to sales, but also to purchases, management service fees and management service revenue to related parties. The sample comprises multinational subsidiaries located in Asian developing countries that have rarely been investigated in previous studies. This research examines the effect of SAAR in preventing TP practices in various types of transaction and develops scoring based on an instrument that integrates each SAAR rule/requirement.

An increasing number of Danish municipalities wish to minimize tax avoidance due to profit shifting in their public procurement. To facilitate this effort, this study aims to develop a firm-level indicator to assess the potential risk of profit shifting (PS-risk) from Danish subsidiaries of multinational corporations to subsidiaries in low-tax jurisdictions.

Drawing from previous research, PS-risk is assumed to depend on the maximum difference in the effective corporate tax rate between the Danish subsidiary and other subsidiaries under the global ultimate owner, in conjunction with the tax regulations relevant to profit shifting. The top 400 contractors in Danish municipalities from 2017 to 2019 are identified and their relative PS-risk is estimated by combining information about corporate ownership structure with country-specific information on corporate tax rates, tax regulations and profit shifting from three independent data sets.

The PS-risk estimates are highly significantly positively correlated across the data sets and show that 17%–23% of the total procurement sum of the Danish municipalities has been spent on contracts with corporations having a medium to high PS-risk. On average, PS-risk is highest for large non-Scandinavian multinational contractors in sectors such as construction, health and information processing.

Danish public procurers may use the indicator to screen potential suppliers and, if procurement regulations permit, to ensure high-PS-risk bidders document their tax practices.

The PS-risk indicator is novel, and to the best of the authors’ knowledge, the analysis provides the first estimate of PS-risk in Danish public procurement.

The purpose of this research paper is to underscore that harmonization of laws, much as it might not offer a lasting cure of tax avoidance and other forms of financial crimes, can enhance the fight against it and subsequently help to forestall it. Tax avoidance has remained an intractable challenge and costs governments astronomical sums of money, largely because taxation is a sensitive issue in the realm of sovereign national jurisdictions. The first part of this paper involves a review of empirical data on tax avoidance to create a context for evaluating theoretical issues on tax avoidance and how they are manifested in practice. It draws examples in a cross-jurisdictional perspective given the global character of tax avoidance and evasion as financial crimes. The last part of this paper discusses possible recommendations that could be implemented to tackle tax avoidance and its attendant challenges on economies.

The author has carried out a scoping review of the literature on tax avoidance and myriad of ways used to commit it globally. There was a wealth of data on tax avoidance, evasion, money laundering and harmonization of laws, which was reviewed and applied in undertaking this study. These data were sourced from published academic books, journal articles and online data sources/websites. This paper reflects on and internalizes most recent empirical data on tax avoidance and evasion such as unprecedented leak of millions of files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca – the so-called “Panama papers”, which has revealed the extent of tax avoidance globally. It also goes an extra length (literally speaking) to underscore important measures that ought to be introduced to address tax avoidance, evasion and money laundering once and for all.

The findings of this paper confirm that while harmonization of law has its inherent shortcomings, it is necessary to enhance individual state’s ability to deal with overlapping interstate challenges such as tax avoidance. This paper proffers a thorough analysis of tax avoidance, the varied context in which it is manifested with a view to evaluate measures that could be adopted by states to minimize or forestall it globally.

This paper has used data on tax avoidance and cognate areas in underscoring inherent challenges in current measures against tax avoidance globally. There were not many studies carried out on the role of harmonization in bolstering states’ efforts against tax avoidance and other financial crimes.

Paying taxes or avoiding paying it has a direct bearing on people, societies and national governments. It is therefore important that states adopt measures to curtail tax avoidance – because it costs governments a lot of revenue.

Though studies have been conducted on tax avoidance and cognate areas, this paper articulates that harmonization could greatly enhance the fight against it globally. This paper will appeal to tax authorities, banks, governments, policy makers, oversight financial institutions and those who have a vested interest in regulation of financial crimes globally.

Profit shifting is a matter of great concern for governments internationally. It leads to the loss of tax revenues and puts multinational corporations (MNCs) in a disparate position. Lately, due to the aggressive stance of the Indian taxman, several Indian MNCs are planning to minimise their tax outflows. This paper aims to study profit-shifting drawing from the institutional theory for the Indian MNCs.

The sample comprises 679 MNCs listed on the Bombay Stock Exchange or the National Stock Exchange with either Indian parents with foreign subsidiaries (553) or Indian subsidiaries of a foreign parent (126) for FY 2013–14 to FY 2018–19. A fixed-effect panel regression technique was invoked to examine tax rate differential motivated profit-shifting undertaken by MNCs with the moderating effect of international presence and patents.

The results suggest that MNCs shift their profits to take advantage of differences in global tax rates when they have an international presence in at least five tax countries. Further, profit shifting is likely towards no-tax compared to low-tax countries, with the presence of patents in an MNC group having no significant impact.

Losses to the government revenue due to profit shifting by MNCs are rather severe in emerging economies. The study provides the first empirical evidence of the direction of profit shifting with the moderating effect of the extent of global presence and group patents, which would interest scholars in the field. The findings provide valuable insights to the policymakers, highlighting the urgent need to operationalise the general anti-avoidance taxation rules.