Taxation

• 80% partial exemption regime extended to cover companies engaged in:

  • leasing and provision of international fibre capacity

  • Reinsurance and reinsurance brokering

  • Sale, financing arrangement and asset management of aircraft and its spare parts, including aviation related advisory services

• Income Tax Regulations 1996 (ITR) will be amended to address:

  • Detailed substance requirements for companies to benefit from the partial exemption regime.

  • Conditions to be satisfied for a company outsourcing  its core income generating activities

• The conditions for the outsourcing company will include:

  • Ability to demonstrate adequate monitoring of the outsourced activities

  • Conducting the outsourced activities in Mauritius

  • Not counting the economic substance of service providers multiple times by multiple companies when evidencing their own substance in Mauritius

Controlled Foreign Company (CFC) rules will be introduced

New attractive tax regime will be introduced to promote the development of REITs

Accelerated depreciation threshold raised from Rs30,000 to Rs60,000 for capital expenditure incurred on plant and machinery

• Levy expensed by banks under Value Added Tax (VAT) Act is not tax deductible for corporate tax purposes

• Reduced tax rate of 5% applicable on the chargeable income of a bank in excess of its chargeable income in the base year, YOA 2017/2018, if the bank grants at least 5% of its new banking facilities to the following categories of businesses in Mauritius:

  • Small and Medium Enterprises (SMEs)

  • Enterprises engaged in agriculture,manufacturing, or production of renewable energy

  • Operators in African or Asian countries

• 150% tax deduction of case filing fee from taxable income for parties attempting mediation, conciliation and arbitration

• 150% tax deduction on cleaning, renovation and embellishment works for hotels

• Double deduction for expenditure incurred on fast charger for electric cars

Effective as from 1 July 2018, companies facing financial difficulty can carry forward unrelieved accumulated tax losses upon change in the ownership of the company, subject to meeting the conditions of the Minister

• VAT removed on specialised compression garments used for medical purposes.

• VAT removed on vermicelli, toukmaria, linseed, saggoo, appalam, mustard seed and sesame seed.

VAT and customs duty exemption on printed materials by airlines bearing their insignia, publicity materials and uniforms.

• Cooking gas for domestic use by households in cylinders up to 12 kg will be zero rated at a reduced selling price of Rs210.
  

• Transport fares of passengers by light rail will be zero rated.
  

• With retrospective effect as from 1 March 2019, bread classified as zero-rated.

VAT exemption on construction of marinas.

• Income derived from Global Business Companies exempt from levy.
  

• Levy increased from 4% to 4.5% of operating income for a bank having operating income over Rs1.2bn.
  

• A cap will be introduced on the increase of levy payable.
  

• No foreign tax credit will be allowed against the special levy.

Service Fee for Tax Residency Certificate (TRC)

• Exemption from service fee payment for obtaining TRC by artists.

Corporate Social Responsibility (CSR) Assessment

• The MRA may raise an assessment on a company which has neither spent the CSR fund as required by the law nor remitted same to the MRA.

Arm’s Length Transaction

• The arm’s length provision will be amended to remove any doubt or uncertainty about its application

• Compulsory registration for wholesale dealers in liquor and alcoholic products.

• Services provided to a foreign company which is outside Mauritius will continue to be zero-rated to the extent that the foreign company does not in turn supply these same services to another local company.

• VAT exemption on payment of subscription fees will be extended to cover prescribed professional bodies.

• Where there is a splitting of a business entity into different entities to avoid registration for VAT purposes, each entity will be required to be compulsorily registered for VAT.

• A VAT invoice issued to a non VAT registered person in business should include his name, business address and the Business Registration Number.

• It was clarified that the management of insurance schemes is exempted from VAT.  

• A VAT registered person may claim repayment of VAT paid on -

  • Goodwill on acquisition of a business; and

  • The acquisition of intangible assets such as software, patents or franchise agreements.

• All VAT-registered persons will have to file their VAT return and pay VAT electronically as from 1 March 2020.