Case study: UPL Corporation Ltd v The Revenue Tribunal & Anor 2026 SCJ 161

On 16 April 2026, the Supreme Court of Mauritius (“SC”) delivered its judgment in UPL Corporation Ltd v The Revenue Tribunal, ruling in favour of the Appellant and overturning the decision of the Assessment Review Committee (“ARC”), in respect of pooling of actual and deemed foreign tax credits.

Background

The appellant, UPL Corporation Ltd, is a company incorporated in Mauritius holding a Category 1 Global Business Licence. The company derives foreign source income from two primary streams: dividend income and non-dividend income.

The dispute arose following tax assessments issued by the Mauritius Revenue Authority (MRA) for the years of assessment 2013 and 2016/17. The company had applied the “pooling basis” under the Income Tax (Foreign Tax Credit) Regulations 1996 (“FTC Regulations”), aggregating actual (proved) foreign tax suffered on dividends with the 80% presumed foreign tax on its non-dividend income. The MRA and subsequently the ARC, now the Revenue Tribunal (“RT”), rejected this methodology, asserting that the taxpayer must choose either proved or presumed tax for the entire pool, but cannot combine both.

Issues

The central legal issue was whether the pooling basis under Regulation 6(3)(a) of the FTC Regulations allows a taxpayer to aggregate proved foreign tax with presumed foreign tax, or whether the law requires a restrictive choice of one single method (either proved or presumed) for all income within the pool.

Analysis

The Supreme Court identified several key errors in the ARC’s initial interpretation and provided the following reasoning:

• The “fallacy” of a second option: The Court found that there is no basis in the regulations for the “fallacy” that a taxpayer must exercise a second option between proved and presumed tax once the pooling method is chosen.

• Evidence vs. election: Regulation 8 of the FTC Regulations is an “evidentiary provision” rather than a choice-based one. Proved tax is the general rule requiring written evidence, while presumed tax is a statutory exception (concession) for qualified corporations when such evidence is unavailable.

• Definition of “pooling”: The reference to “all foreign source income” in Regulation 6(3)(a) of the FTC Regulations provides for the possibility of relying on a combination of proved and presumed tax depending on the available evidence for different items within that pool.

• No legal impediment to aggregation: The Court found no legal impediment in the regulations preventing a taxpayer from aggregating proved tax on dividends and presumed tax on non-dividend income before limiting the total against the Mauritius tax payable.

• Favouring the taxpayer: Given that the regulations are “not a model of clarity,” the Court reaffirmed the principle that any ambiguity in tax legislation must be resolved in favor of the taxpayer

The Supreme Court (SC) overturned the ARC’s position, rejecting what it described as the “fallacy” that a taxpayer must choose between proved and presumed tax as a “second statutory option” once the pooling method is selected. The Court dismissed the MRA’s restrictive approach, confirming that:

• The FTC rules must be applied as a coherent whole, requiring Regulation 6 (limits) and Regulation 8 (proof) of the FTC Regulations to be read together.

• It is not permissible to read additional restrictions into the legislation where they are not expressly provided, such as forcing a choice between tax types for an entire pool.

• The pooling method allows for aggregation of both actual (proved) foreign tax and presumed foreign tax for different income streams within the same year of assessment.

• Statutory relief must be granted as written; as the regulations are “not a model of clarity,” any resulting ambiguity must be resolved in favour of the taxpayer.

Although the 80% presumed foreign tax is no longer available, the decision confirms the fundamental interpretation and application of the FTC Regulations. The Supreme Court quashed the ARC’s finding and sent the case back to the Revenue Tribunal for reconsideration in line with this interpretation.