A taxpayer owns exactly 50% of the shares/voting rights of a Mauritian company and the balance is held by a non-resident. In my view: 1) Section 9D is not applicable because the section requires more than 50% to be operative re attribution of the foreign
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
For the purposes of section 9D(1) 'controlled foreign company' means
(a) any foreign company where more than 50 per cent of the total participation rights in that foreign company are directly or indirectly held, or more than 50 per cent of the voting rights in that foreign company are directly or indirectly exercisable, by one or more persons that are residents other than persons that are headquarter companies …
We accept that the company’s place of management is in Mauritius. The requirement indeed is “more than 50 per cent”.
Section 10B(2)(a) exempts from normal tax any foreign dividend received by or accrued to a person if that person … holds at least 10 per cent of the total equity shares and voting rights in the company declaring the foreign dividend …