Privy Council Clarifies “Business with a View to Profit” Under Mauritian Tax Law

Marie Henri Dominique Galea v Assessment Review Committee & Anor [2025] UKPC 17On 8 April 2025, the Judicial Committee

On 8 April 2025, the Judicial Committee of the Privy Council delivered a landmark judgment in Marie Henri Dominique Galea v Assessment Review Committee and another [2025] UKPC 17, overturning decisions of both the Assessment Review Committee and the Supreme Court of Mauritius.

ETUDE GUY RIVALLAND acted as instructing attorney and agent for the appellant in this successful appeal.

The decision now stands as the leading authority in Mauritius on the meaning of “business” and “with a view to profit”under section 2 of the Income Tax Act 1995.

What the case was about

The appeal concerned whether a loss-making partnership may nonetheless be regarded as carrying on a business with a view to profit for Mauritian tax purposes.

The appellant was an associé of Société Agricole de Mont Sur Mont (SAMM), a fiscally transparent partnership owning agricultural land at Baie du Cap.

SAMM’s activities included deer breeding, controlled hunting, sale of venison, and sale of live monkeys when legally permitted.

SAMM incurred operating expenses typical of commercial activity, including employee wages and land maintenance costs.

Although SAMM sustained losses over several consecutive years, each associé bore those losses on a prorated basis.

The appellant claimed his share of those losses as deductible against his personal taxable income.

Decisions of the tax authorities and lower courts

The Mauritius Revenue Authority took the view that SAMM’s activities did not amount to a business.

It characterised the operations as a hobby allegedly lacking a profit-making motive.

The Assessment Review Committee accepted that position.

The ARC applied an objective test, requiring a reasonable expectation of making a profit in the near future.

The Supreme Court of Mauritius upheld the ARC’s approach without reassessing the applicable legal test.

What the Privy Council decided

The Privy Council held that both the ARC and the Supreme Court applied the wrong test in law.

The Board confirmed that the statutory phrase “with a view to profit” requires a subjective test of intention, not an objective assessment of short-term profitability.

There is no legal requirement that profits be expected in the near future.

Persistent or long-term losses do not prevent an activity from constituting a business.

The Board accepted that SAMM had undertaken genuine and sustained efforts to generate income and improve its financial position.

The appellant’s credibility as to his commercial intention was never challenged in cross-examination, which the Board considered legally significant.

The outcome

The appeal was allowed.

The Privy Council held that SAMM was carrying on a business within the meaning of section 2 of the Income Tax Act 1995.

The appellant was entitled to deduct his share of partnership losses against his taxable income.

The matter was finally determined by the Board without remittal.

Why this judgment matters

This is the first authoritative Privy Council decision interpreting the statutory meaning of “business” under Mauritian tax law.

The judgment provides important guidance for:

• partnerships and sociétés,

• land-based and agricultural ventures,

• long-term or capital-intensive projects, and

• tax audits involving loss utilisation.

It confirms that commercial intention prevails over accounting outcomes.

It limits the use of hindsight profitability tests by tax authorities.

Our role

ETUDE GUY RIVALLAND acted as instructing attorney and agent in this Privy Council appeal.

The case reflects the firm’s experience in complex tax litigation, appeals, and Privy Council proceedings involving Mauritian law.