The Budget 2026–2027 broadens the scope of Tax Deduction at Source (TDS) to capture two fast-growing areas of business spending: software services and social-media/influencer marketing. If your company pays for either, you may now need to withhold tax at source. This is a niche change that many businesses will miss — so it's worth getting right.
What TDS is
TDS requires the payer to deduct a percentage of tax when making certain payments, and remit it to the Mauritius Revenue Authority. It shifts collection to the point of payment. The budget extends the categories of payments that are caught.
The two new categories
The scope of TDS is broadened to cover payments made by a company to:
| Payment type | Rate | Condition |
|---|---|---|
| Software, software licences, applications, software maintenance, or distance maintenance of programmes and equipment | 1% | Single contract where payment exceeds Rs 300,000 (resident or non-resident provider) |
| Advertising, promotional, endorsement, digital content or marketing services through social media platforms or similar electronic means | 5% | Applies to the relevant service providers |
Why it matters
These changes touch two very common types of spend:
- Software: SaaS subscriptions, licences and maintenance contracts above Rs 300,000 now trigger 1% TDS. The rule applies whether the provider is resident or non-resident, so cross-border software contracts are firmly in scope.
- Influencer and digital marketing: payments to people or businesses providing advertising, promotional, endorsement, digital content or marketing services through social media attract 5% TDS. This formalises the tax treatment of the influencer economy.
Compliance steps
If your company makes these payments, you should:
- Identify contracts and suppliers that fall within the two categories.
- Check whether software contracts exceed the Rs 300,000 threshold.
- Deduct the correct rate (1% or 5%) at the point of payment.
- Remit the deducted tax to the MRA and keep records.
Getting this wrong can create exposure, so it's worth confirming your processes with an accountant. Our accounting service and the directory of verified accountants can help you set up compliant withholding. For related digital-tax changes, see our VAT changes guide, and for the full picture, the Budget 2026–2027 business guide.
Frequently Asked Questions
What is the TDS rate on software payments in Mauritius?
TDS applies at 1% on payments for software, software licences, applications and maintenance services under a single contract where the payment exceeds Rs 300,000, for both resident and non-resident providers.
Is there TDS on influencer and social media marketing?
Yes. A 5% TDS applies to payments for advertising, promotional, endorsement, digital content or marketing services provided through social media platforms or other similar electronic means.
Does TDS apply to non-resident software suppliers?
Yes. The software-related TDS applies to both resident and non-resident service providers where the single-contract payment exceeds Rs 300,000.
Who is responsible for deducting TDS?
The company making the payment is responsible for deducting the correct amount of tax at source and remitting it to the Mauritius Revenue Authority.
What is the threshold for software TDS?
The 1% software TDS applies where the payment under a single contract exceeds Rs 300,000.