Taxation
Key tax measures:
Progressive tax System
- 2% to 20% applied on chargeable income
Solidarity Levy on Individuals
- Solidarity levy abolished and dividends fully exempt
95% exemption
- Interest earned by Collective Investment Schemes or Closed End Funds
Special Levy on Banks under the VAT Act
- Special Levy of 5.5% for large banks
Solidarity Levy on Telephony Service Providers
- Loss making telephony service providers required to pay Solidarity Levy at 1% of turnover.
Corporate Tax
- 95% partial exemption on interest
- Tax Exemption on Green Bonds
- Taxation of banks
- Export of Goods
- Solidarity Levy on Telephony Service Providers
- Investment Tax Credit (ITC)
- Tax deductions
- Waiver of Covid-19 Levy
- Financial Assistance to Specified Enterprises - Salary Compensation 2023
- Tax holidays
95% partial exemption on interest
- Partial exemption on interest earned by Collective Investment Schemes (CIS) or Closed End Funds increased from 80% to 95%.
Tax Exemption on Green Bonds
- Interest income derived from bonds, debentures or sukuks issued by an overseas entity to finance an approved renewable energy projects (Green Bonds) will be exempted.
Taxation of banks
- The reduced tax rate of 5% available to banks having a chargeable income in excess of the chargeable income for the base year of 2017/2018 has been abolished as from the year of assessment 2022/2023.
- Partial exemption on interest earned by Collective Investment Schemes (“CIS”) or Closed End Funds increased from 80% to 95%.
Export of Goods
- Profits derived from the sale of aviation fuel to an airline treated as export of goods and taxed at 3%.
Solidarity Levy on Telephony Service Providers
Solidarity Levy calculated at 5% of book profit and 1.5% of turnover for profitable telephony service providers have been amended to 5% of book profit and 1% on turnover.
Loss making telephony service providers will be required to pay Solidarity Levy at 1% of turnover.
Investment Tax Credit (ITC)
- A 15% ITC granted to manufacturing companies in respect of expenditure incurred on new plant and machinery (excluding motor cars) for a 3-year period (45% in total) has been extended up to financial year 2025/2026,
Any unrelieved ITC may be carried forward for 10 years.
Companies engaged in the manufacturing of both alcoholic and non-alcoholic beverages will be allowed to claim the ITC in respect of expenditure incurred on new plant and machinery (excluding motor cars) only on non-alcoholic beverages.
Tax deductions
- Double deduction on the cost of setting up childcare centres
- Double deduction granted to companies employing newly recruited women or women who were unemployed for at least a year under the Prime a L’Emploi Scheme.
- A 300% tax deduction granted to companies employing persons with disabilities under the Prime a L’Emploi Scheme.
- Double deduction granted to manufacturing companies in respect of expenditure incurred on market research and product development will no longer be restricted to the African market but is limited to companies having an annual turnover of less than Rs500m.
- Double deduction granted to local companies participating in the financing, sponsorship or marketing and/or distribution of an approved film project under the Film Rebate Scheme, intended for theatrical or media streaming release, subject to the production being at least 90% in Mauritius.
Waiver of Covid-19 Levy
- All outstanding debts under the Covid-19 Levy as at 20 January 2023 inclusive of penalties and interest will be waived.
Financial Assistance to Specified Enterprises - Salary Compensation 2023
- A monthly financial assistance will be provided for the payment of salary compensation 2023 of:
Tax holidays
- Additional 5-year tax holiday granted to Mauri-Facilities Management Co Ltd which has been given additional responsibilities under the National Clean-up Campaign.
Personal Tax
- Progressive income tax
- Solidarity Levy
Progressive income tax
The annual chargeable income of an individual will be taxed as follows:
Solidarity Levy
- Solidarity Levy imposed on individuals earning a leviable income of more than Rs3m has been abolished.
Value Added Tax
- Removals, exemptions & extensions
- Special Levy on Banks
Removals, exemptions & extensions
- Removal of VAT on 15 essential products (noodles, toothpaste, toothbrush, etc), medical grade silicone and all musical instruments.
Removal of VAT and Customs Duty on glass ceramic blocks for dental use.
Extension of VAT exemption to the construction of a purpose-built building for the provision of primary and secondary education.
VAT, Customs Duty and Excise Duty exemption to contractors engaged in the construction of social housing units under a Social Housing project implemented by New Social Living Development Ltd. The tax exemptions will be applicable on the procurement of goods (excluding vehicles), works, consultancy services and other related services.
Zero-rate VAT on instruments and appliances used in medical, surgical, dental or veterinary sciences of HS Code 90.18 (instead of VAT exempt).
Zero-rate VAT extended to water supplied, infrastructure and renting out of meters by the Rodrigues Public Utilities Corporation.
Special Levy on Banks
Special Levy rate increased to 5.5% for large banks
Other Taxes
- Property tax
- Excise Duty
Property tax
Home ownership scheme in relation to refund of 5% of the cost of the property up to a maximum of Rs500,000 extended up to 30 June 2024.
Under the home ownership scheme, refund on properties acquired under the ‘vente en l’état futur d’achèvement’ (VEFA), will be made in respect of the amount paid by the purchaser under the VEFA agreement up to 30 June 2025.
A person contracting a secured housing loan under the home loan payment scheme to construct his residence will continue to benefit from a refund of 5% of the loan amount, up to a maximum of Rs500,000, until 30 June 2024. Amounts of loan disbursed up to 30 June 2025 will qualify under this scheme.
Excise Duty
- Excise duty rebate scheme on motor vehicles extended up to 30 June 2024.
- Negative excise duty scheme of 10% for the purchase of electric vehicles by individuals, up to a maximum of Rs200,000 extended up to 30 June 2024.
Effective as from 3 June 2023, increase of 10% on excise duty for alcoholic and tobacco products.
Tax Administration
- Statement of Financial Transactions
- Extension of Tax Deduction at Source (TDS)
- TDS exemptions
- Tax Arrears Settlement Scheme (TASS)
- Protected Cell Company (PCC) and Variable Capital Company (VCC)
- Power to require additional information from banks
- Tax Administration: Value Added Tax (VAT) Event organiser exempt from payment of VAT
- VAT refund on residential building, house or apartment - additional condition
Statement of Financial Transactions
A virtual asset service provider and an issuer of initial token offerings will have to report annually to the MRA a transaction made by:
Extension of Tax Deduction at Source (TDS)
- TDS applicable on:
TDS exemptions
- TDS will not apply on fees paid to:
Tax Arrears Settlement Scheme (TASS)
- Extension of TASS providing full waiver of penalties and interests for tax arrears outstanding under the Income Tax Act, the Value Added Tax Act and the Gambling Regulatory Authority Act, provided the taxpayer registers by 31 December 2023 and pays the tax in full by 31 March 2024.
- TASS also applicable to assessments pending before the Assessment Review Committee (ARC), the Supreme Court or Judicial Committee of the Privy Council.
Protected Cell Company (PCC) and Variable Capital Company (VCC)
- The MRA will not recover tax owed by a cell of a PCC by having recourse to assets of other cells or non-cellular assets of the PCC.
- Likewise, each sub-fund or special purpose vehicle of a VCC will be treated as a separate entity for the purpose of recovery of tax.
Power to require additional information from banks
- The MRA will be allowed to request additional information from a bank if a benefit payable by the MRA has been credited in a wrong bank account.
Tax Administration: Value Added Tax (VAT) Event organiser exempt from payment of VAT
- Event organisers are exempt from payment of VAT on accommodation costs incurred for a qualifying event.
VAT refund on residential building, house or apartment - additional condition
- Additional condition to be satisfied to qualify for VAT refund is that the construction value should not exceed Rs 3m.
Immigration
- Occupation Permit (OP)
- Work Permit (WP)
- Visa
- Acquisition of Property
Occupation Permit (OP)
- Reduction of salary threshold to Rs30,000 for OP as professional.
- Young Professional Occupation Permit (YPOP) opened to all fields of study.
- OP investor and self employed applicants granted 4 weeks from date of issuance of permit to show evidence of transfer of funds
- Bank statement along with a written undertaking to open a bank account within 2 months will be accepted for retired non-citizens instead of opening a bank account at an initial stage.
Work Permit (WP)
Abolition of ratio of foreign to local employees for sectors such as construction, Manufacturing, Agriculture and SMEs, including Bakery Operator.
Application for WP allowed for non-citizens present in Mauritius under a tourist or business visa.
Approval of WP will be deemed to have been granted upon the issuance of an electronic work permit certificate if no response has been received from the Ministry of Labour, Human Resource Development and Training within 4 weeks of the date of application.
Introduction of three tier system to fast track the processing time of WP. Recruiting companies will be classified by the Economic Development Board and each category will have a specific timeframe.
Maximum duration of stay of 4 years removed for carers who will now be allowed to work in Mauritius as long as their service is required.
New policy framework for employment of domestic migrant workers (Maids and Babysitters) expected from the Ministry of Labour, Human Resource Development and Training.
Visa
- Business Visa of 120 days granted to OP applicant without having to leave Mauritius.
Introduction of 18 months International Expert Training Visa.
Eligibility to premium visa for medical patients and retirees as well as up to 2 accompanying caretakers.
Acquisition of Property
- Residence Permit granted to retired non-citizen and his family on the acquisition of property in PDS project relating to senior living provided:
Acquisition price exceeds USD200,000
Acquirer is older than 50 years old
Property Acquisition outside existing schemes allowed subject to a payment of an additional registration fee of 10% .The minimum value of the property acquired has been increased to USD500,000.
The main Residence Permit holder (not his spouse or children) is allowed to acquire only one property.
Residence Permit granted to a non citizen and his family upon the acquisition of a property of a minimum price of USD375,000 under the sustainable city scheme.
Read more all measure in our Budget Brief 2023 - 2024.
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