Section 75: Application of arm’s length test

75. Application of arm’s length test (1) This section shall apply to any case where— (a) any business or other income earning activity carried on in Mauritius— (i) is controlled by a non-resident; or (ii) is carried on by a non-resident company or by a company in which more than one half of the shares are held by or on behalf of a non-resident; or (b) in the carrying on of any business or other income earning activity in Mauritius any person controlling that business or activity, by reason of his relationship or otherwise with any other person, is not in the opinion of the Director-General at arm’s length with that person with respect to any commercial or financial transaction; and (c) it appears to the Director-General that the business or other income earning activity in Mauritius produces no net income or less than the amount of net income which in the opinion of the Director-General might be expected to be derived from that business or activity. (2) Where the conditions specified in subsection (1) are satisfied, the net income of any person carrying on a business or other income earning activity in Mauritius shall be the amount which the Director-General determines would have been derived from that business or activity, had all its commercial and financial transactions and relations been wholly at arm’s length. (3) The Minister may make such regulations as he may determine for the purpose of this section.