In general, the taxable
income of a branch of a foreign company is computed in the same way as that
of a resident company. However, a branch may not claim a deduction for
interest and royalties paid to its foreign head office. Payments of interest
and royalties by a Mauritian subsidiary to its foreign parent, on the other
hand, are deductible, although the payments will constitute Mauritian source
income subject to Mauritian income tax in the hands of the
A branch may deduct management expenses changed to it by a foreign head office provided the charge is reasonable having regard to the nature and extent of the management services rendered.