The double taxation agreement between Mauritius and Luxembourg plays a central role for international investors, corporate groups, expatriates, and high net worth individuals. In a context marked by increased controls, the OECD, the MLI (multilateral instrument) and the automatic exchange of information, understanding this agreement is essential for structuring an investment, setting up a business or optimizing wealth between these two jurisdictions.
This guide offers a clear, practical, and up-to-date overview of the tax rules between Mauritius and Luxembourg, with a particular focus on real estate income, investment structures, capital gains, and tax residence.
1. Objectives of the Mauritius–Luxembourg agreement
The agreement aims to prevent taxpayers from being taxed twice on the same income.
It clearly defines which country has the right to tax:
- property income
- salaries
- dividends
- interest
- pensions
- capital gains
- corporate benefits
It also enhances legal certainty for investors and prevents abusive practices through the MLI and Principal Purpose Test.
2. Real estate income: a fundamental rule
Income and capital gains from real estate located in Mauritius are taxable only in Mauritius.
This concerns :
- rents
- short-term rental income
- capital gains on resale of the property
- land and villas in PDS, IRS, RES, Smart City
- off-scheme properties if the owner is a Mauritian resident
The consequence is clear: Luxembourg does not have the right to tax Mauritian real estate income.
However, this income may be taken into account in the Luxembourg effective tax rate mechanism depending on the taxpayer’s situation, without direct taxation.
This point is one of the most powerful advantages for investors from Luxembourg, particularly for purchases of beachfront villas or premium properties in golf estates, where capital gains are taxed at 0% in Mauritius.
3. Professional income and salaries
Salaries are taxed in the country where the activity is physically carried out.
A Luxembourg resident working in Mauritius will only be taxed in Mauritius.
Similarly, a Mauritian working in Luxembourg is taxed in Luxembourg.
Telecommuting is not considered as an activity “carried out” in the country where the employer is located, but in the country where the employee physically resides.
4. Dividends, interest and capital income
Dividends
Dividends distributed by a Mauritian company to a Luxembourg resident are taxed in Mauritius at a very low rate (0% in most cases via GBL).
Luxembourg may apply its own system, but generally provides a tax credit equal to the tax paid in Mauritius.
Interest
Interest from Mauritius is taxable only in the beneficiary’s state of residence, i.e. Luxembourg.
Mauritius does not levy withholding tax on interest, which is a significant advantage.
Revenues & royalties
As a general rule, they are taxable in the beneficiary’s country of residence, except in special cases.
5. Pensions and retirement: 2026 rules
Public pensions
Pensions paid by a Luxembourg public body are taxed only in Luxembourg.
Private pensions
Private pensions are taxed in the beneficiary’s country of residence.
A Luxembourg pensioner living in Mauritius is therefore taxed in Mauritius, with a simple and often advantageous tax system.
6. Securities and capital gains
Capital gains on shares, partnership interests, or business disposals are taxable according to the beneficiary’s residence.
For Mauritian tax residents, capital gains are generally exempt in Mauritius, which attracts many Luxembourg entrepreneurs and investors.
For Luxembourg residents, Luxembourg tax law may apply according to the country’s own rules.
7. Determining tax residence: a major challenge in 2026
With the strengthening of the CRS and international controls, tax residency must be consistent, real and documented.
Becoming a tax resident in Mauritius
Two main routes:
- reside 183 days or more in the year
- obtain a residency permit via a real estate investment (from $375,000 USD)
To be recognized as a Mauritian tax resident, daily life, center of vital interests, financial flows and overall coherence must be proven.
Conflict of residence
If a person is potentially resident in both countries, the convention applies a hierarchy of criteria:
- permanent housing
- center of vital interests
- usual place of residence
- nationality
- friendly settlement
8. Company profits and holding companies
The convention is particularly used in international schemes where :
- Luxembourg holding companies hold interests in Mauritius
- Mauritian structures (GBL, domestic companies) invest abroad
- groups use Mauritius as an African platform
Profits are taxed in the company’s state of residence, unless there is a permanent establishment in the other country.
Mauritius is often chosen for :
- its legal stability
- predictable taxation
- no tax on capital gains
- its strategic positioning in Africa and Asia
9. Automatic exchange of information (CRS): full transparency
Mauritian banks and financial institutions automatically transmit to the Luxembourg authorities :
- account balances
- financial income
- movements
- structure information
- personal and business accounts
This transparency requires perfect consistency between :
- declarations in Luxembourg
- financial reality in Mauritius
- investments held
- incoming and outgoing flows
10. Key benefits for Luxembourg residents and investors
The advantages of the convention are particularly sought after by wealthy families, entrepreneurs and real estate investors:
- ultra-attractive real estate taxation (0% on capital gains)
- property income taxed only in Mauritius
- no wealth tax (no equivalent IFI)
- easier transfer of assets
- gentle tax treatment for private pensions
- stable political and financial environment
For real estate investors, the purchase of beachfront villas, exceptional properties, or golf course residences benefits from a secure tax framework.
11. Points to watch in 2026
- demonstrate real and consistent tax residency
- comply with MLI anti-abuse rules
- document international financial flows
- beware of using opaque companies with no substance
- consistency between the Mauritian bank and the tax declared in Luxembourg
- avoid artificial structures
Conclusion
The double taxation agreement between Luxembourg and Mauritius is a powerful tool for structuring international assets, optimizing real estate investments, and organizing controlled tax mobility. In 2026, it remains one of the most attractive agreements for Luxembourg investors, provided it is used rigorously, consistently, and transparently.
Mauritius offers a favorable, stable, and predictable tax environment, which is particularly appreciated for high-end acquisitions: beachfront villas, golf residences, off-market properties, and premium developments.
Personalized support from Ohana Heritage for your wealth and real estate strategy
If you wish to invest in Mauritius or clarify the impact of the Luxembourg–Mauritius tax treaty on your personal situation, Ohana Heritage can assist you with a structured, discreet approach tailored to the requirements of high-end assets. We analyze your project, your objectives, and your investment horizon in order to present you with only truly relevant opportunities: beachfront villas, golf residences, off-market properties, or assets with high strategic value.
Would you like us to talk briefly so we can understand your situation and offer you the products or solutions that best meet your expectations?
We remain available to guide you on real estate, tax, and administrative matters related to your relocation or investment in Mauritius.
