MRA Pursues Massive Rs 6.6 Billion Tax Claim Against a Major Tech Subsidiary

A subsidiary of the global semiconductor giant Broadcom Inc. is facing a historic tax demand of Rs 6.6 billion, a figure representing nearly one-third of the Mauritian national health budget.

The debt, owed by Avago Technologies Trading Ltd (ATTL), was disclosed in the National Assembly by Prime Minister Navin Ramgoolam in response to a parliamentary question from MP Ram Etwareea.

The sum is part of a wider Rs 25.7 billion in total tax arrears recorded by the Mauritius Revenue Authority (MRA) as of 31 March 2026.

Legal Deadlock

Despite the scale of the claim, ATTL has moved to contest the findings. The Prime Minister confirmed that the company has appealed to the Supreme Court without first settling the requested amount.

“The taxpayer has appealed to the Supreme Court without paying the tax due. The MRA has initiated recovery actions, which are currently the subject of litigation,” Mr Ramgoolam stated.

The dispute follows a July 2024 ruling by the Assessment Review Committee (ARC), which sided with the MRA’s view that the company’s financial arrangements constituted tax avoidance.

Transfer Pricing Dispute

At the heart of the legal battle is the “arm’s length principle” regarding royalties paid by the Mauritius-based ATTL to GEN IP in Singapore.

The MRA challenged the company’s use of the Transactional Net Margin Method (TNMM), opting instead for the Comparable Uncontrolled Price (CUP) method.

Tax authorities argued that the royalties paid were excessive and designed to avoid local tax liabilities.

The ARC subsequently upheld the MRA’s position, limiting the deductions ATTL could claim.

A Lean Operation with Global Reach

Incorporated in Mauritius in 2007, ATTL serves as a primary manufacturing and trading entity for the broader group, producing semiconductors and chips for AI, networking, and communications.

Despite its massive financial turnover, the company reportedly operates with a minimal staff of just two employees.

It functions primarily as a trading and holding entity within the global structure of Broadcom Inc., the NASDAQ-listed powerhouse led by CEO Hock Tan.

National Economic Impact

To put the Rs 6.6 billion debt into perspective, it accounts for a significant portion of the country’s fiscal landscape:

• Health Budget Comparison: The arrears equal more than a third of the Rs 18.5 billion annual health budget for 2025-2026.
• Corporate Tax Share: Out of Rs 14.9 billion in total corporate tax arrears nationwide, the Avago debt represents the lion’s share.
• Total Arrears Context: The national tax gap also includes Rs 7.1 billion in VAT and Rs 615 million in Social Contribution (CSG) arrears.

Broadcom Inc., formerly Avago Technologies, rose to its current prominence following a $37 billion acquisition of Broadcom Corporation in 2016.

Its major shareholders include institutional heavyweights such as Vanguard and BlackRock.

Source: Defi Media