Income Tax Act 1995 governs the taxation of resident Mauritian companies. Under the law prevailing in Mauritius , taxable income includes rents, dividends, royalties and interest; however, dividends paid by 'tax incentive' companies, companies listed on the stock exchange, and companies which pay the full tax rate are exempt from tax in the hands of the receiving shareholder, whether resident or not.Most importantly ,there is no tax on capital gains arising on investments in shares