• Mauritius will require foreign digital service providers to charge and remit 15% VAT from 1 January 2026.

• Companies earning more than MUR 3 million ( $66,000) from Mauritian consumers must appoint a local tax representative.

• The reform aligns Mauritius with international tax standards based on the place of consumption, not the location of the supplier.

The Mauritian government first announced in 2020 its intention to tax foreign digital services. After several parliamentary debates, the measure now moves toward implementation to strengthen fiscal fairness and adapt the country to the digital economy.

Mauritius integrated a major tax reform into its 2025-26 national budget to impose VAT on digital services supplied by foreign providers. The measure, scheduled to take effect on 1 January 2026, requires international suppliers to charge and remit the standard 15% VAT on services consumed by Mauritian clients.

The reform forms part of the Finance Act 2025, which amends Mauritius’ VAT legislation by defining digital services and foreign suppliers. The law obliges companies without a permanent establishment in Mauritius that supply digital services—including streaming, website hosting, software sales or maintenance, online applications and internet advertising—to register with the Mauritius Revenue Authority (MRA) and comply with the new tax obligations for transactions involving local consumers.

Authorities use several criteria to determine whether a service is consumed in Mauritius. The framework relies on billing address, payment location, client IP address and phone code to eliminate ambiguity regarding the tax jurisdiction.

Foreign providers generating over MUR 3 million in annual revenue from these services must appoint a local fiscal representative responsible for filing VAT returns and remitting the tax owed.

Mauritius positions the measure within a global movement that shifts digital taxation toward the place of consumption instead of the supplier’s location. Authorities aim to reduce competitive distortions between local and foreign providers while broadening the country’s tax base.

Consumers may face higher prices for digital services. Subscriptions to streaming platforms such as Netflix, Amazon Prime and Spotify—widely adopted in Mauritius—will fall under the new VAT regime, potentially increasing monthly bills.

By obliging foreign digital service providers to charge and remit VAT, Mauritius seeks to level the playing field between domestic and international players, reinforce tax compliance and capture a larger share of revenue from the digital economy. The country joins Kenya, Nigeria and Rwanda, which have already implemented similar mechanisms, signalling its commitment to continental tax standards.

This article was initially published in French by Samira Njoya

Adapted in English by Ange Jason Quenum