Every month we hear from a couple in Munich, Vienna or Zurich who have found Mauritius on a winter holiday and want to know how hard it would be to stay. The permit is the easy part. The tax position is where the decision is actually made, and it is the part that most websites either skip or get wrong.
The permit. Anyone aged 50 or over can apply for a Retired Non-Citizen Residence Permit. It runs for ten years, requires no property purchase, and rests on transferring USD 24,000 a year from abroad into a Mauritian bank account, or USD 2,000 a month. A spouse under 50 joins as a dependent. Employment is not permitted on the permit, but investment as a shareholder is. After five years, with aggregate transfers of USD 200,000, the holder may apply for a twenty-year permanent residence permit. That is the whole framework.
Tax residence. Spend 183 days or more in Mauritius in a tax year and you are tax resident here. Mauritius taxes foreign-source income on a remittance basis and has double taxation agreements in force with Germany and with other European jurisdictions. Whether it has one with your country, and what that agreement says about pensions, is the first thing to establish.
The questions to put to a tax adviser before you decide. We are not tax advisers and do not give tax opinions. We do know which questions produce a useful answer.
- Which of my income streams are taxed in the country where they arise under the treaty, and which follow me to Mauritius? State pensions, occupational pensions, private annuities and investment income are often treated differently from one another.
- What does my home country require to accept that I have left? Deregistration, the end of a habitual abode, the number of days I may still spend there. Germany and Austria in particular look at ties, not only at days.
- If I keep a flat at home, does that keep me tax resident there?
- How does the remittance basis in Mauritius interact with the transfers the permit requires? Money brought in to satisfy the permit condition is, by definition, remitted.
- Is there an exit tax, a deferred charge, or a claw-back on any pension or investment product I hold if I become non-resident?
- Will my health insurer continue to cover me abroad, and what does Mauritian private cover cost at my age?
The answers vary enough between the three countries, and between individuals, that no website can give them. What a good adviser needs from you is a clear list of income sources, the assets you would keep at home, and the days you expect to spend where. What we do is introduce the adviser, put those facts in front of them, and hold the permit application until the answers are in.
Most couples who ask the questions still move. They move with a plan rather than with an assumption, which is the only difference that matters.