Taxation

• 8-year tax holiday granted to newly set up freeport operators or developers with an investment of at least Rs50m provided that the companies:
  • start operations on or after 01 July 2022; and
  • conform with the substance requirements which are in line with the Organisation for Economic Co-operation and Development (“OECD”) standards.

Foreign employers of Premium Visa holders will not, in respect of that employee, be subject to corporate tax and social security contributions.

• Annual turnover threshold to qualify as SME amended as follows:

• Additional tax deduction available to large manufacturers on purchases of locally manufactured products from small enterprises will be increased from 10% to 25%. 

• Penalties imposed on SMEs with regards to the late submission of income tax returns and late payment of income tax for the years 2020 and 2021 and which remain outstanding as at 25 March 2022 will be waived. 

• Effective as from 01 January 2022, salary compensation paid by a non-export oriented SME to its employees, for the period up to 30 June 2022, will be refunded as follows:

• Effective as from 01 January 2022, salary compensation paid by an enterprise in the tourism sector to its employees for the period January 2022 to June 2022, will be refunded as follows:

• Transfer of assets to related companies at net tax value extended to include all assets subject to depreciation and not limited to plant, machinery or industrial premises.

• VAT exemption granted on cars (and spare parts) and automobilia imported for the purpose of exhibition in a motor museum.

The TDS rate has increased as follows:

3% TDS now applicable on the following:

A statement of financial transaction required to be submitted to the MRA annually on individuals and companies having purchased shares in listed companies exceeding:

MRA may request information from a foundation or trust in order to make an assessment, collect tax or comply with any request for the exchange of information under a Double Taxation Avoidance Agreement.

• The MRA allowed to share information on an applicant with the GRA.

• Information shared would enable the GRA to determine whether applicant is a fit and proper person for the purpose of issuing a personal management licence.

The MRA allowed to publish on its website the names of non-filers.

• Amendments made to the Income Tax Act to allow for:
  • alternative dispute resolution with a view to resolving cross border tax disputes; and
  • implementing the internationally agreed standards to prevent base erosion and profit shifting.

Extension of the power of the Minister of Finance to make regulations to cover internationally agreed policies to address the tax challenges arising from the digitalisation of the economy.

• A definition of audit-based control under customs laws will be introduced in line with the provisions of revised Kyoto Convention. 

• Where goods are purchased by a departing citizen of Mauritius free of taxes under the deferred duty and tax scheme, and the goods are imported back by him within 6 months of the date of his departure, no taxes will be payable on those goods.

• Payment instructions given by an importer for taxes to be paid electronically to MRA customs will have to be credited within 3 working days.

• The requirement to furnish a security by bond with adequate surety to cover the amount of taxes in case of default will be harmonised and at least one adequate surety will be required in all cases.

• The penalty provision for failure to submit a bill of entry for the clearance of goods within 5 working days after the time an aircraft has landed or a vessel has been berthed will be suspended up to 30 June 2023.

• The implementation of the penalty provision applicable upon failure by a master/agent to make amendments to his aircraft/vessel manifest within 5 working days after the aircraft has landed or vessel has been berthed will be deferred until 30 June 2023.

• A stakeholder allowed to make an objection to a decision of MRA customs electronically for customs, Customs Tariff Act and Excise Act.

• Refund of taxes by MRA customs allowed in cases where a stakeholder objects to a tax assessment and the Objection Directorate at the MRA allows the objection.

• MRA customs allowed to communicate valuation information to Ministries/Departments upon request provided authorisation is obtained from the Minister of Finance.

• Where an order approving a bonded warehouse is revoked, taxes on all warehouse goods will have to be paid by the proprietor/occupier within 2 months of the date of revocation.

• Master/agent or representative of a vessel allowed to submit a consolidated Bill of Entry in respect of bunker fuel loaded during a month on vessels bound for the high seas.

• Where a broker or Freight Forwarding Agent informs MRA customs that he has ceased or intends to cease operation, MRA customs may revoke his authorisation to act as a broker or freight forwarding agent.

• Where a broker or freight forwarding agent has committed a breach entailing suspension but the breach relates to a specific function, MRA customs may allow a broker or freight forwarding agent to continue carrying out those functions where there has been no breach.

• Where, for audit purposes, books and records requested from an importer, exporter, freight forwarding agent or broker are not submitted or access to computers and other electronic devices is not granted to the satisfaction of MRA customs, the latter may raise a claim for payment of taxes.

• Entries for excisable goods made by a manufacturer in respect of goods deposited in an excise warehouse or removed from a factory or a consolidated bill of entry for excisable goods to be warehoused or cleared during a month will be deemed to be a self-assessment.

• Where the MRA allows an objection by a stakeholder claiming refund of excise duty, the refund made shall carry interest. 

• With retrospective effect, a distiller-bottler of alcohol will be allowed to at his factory sell fusel oil for use as biofuel.

• The MRA may carry out “controlled delivery” of excisable goods such as cigarettes and tobacco for the purpose of gathering evidence on the smuggling chain. 

• Extension of the opening hours on consumption of alcohol products in restaurants and pubs to 2am everyday. 

• Extension of the requirement to affix excise stamps to beer and wine in cans and other types of packaging.

VAT compulsory registration

• MRA empowered to register a person who is required to be compulsorily VAT registered but fails to do so.

Electronic publication by the MRA

• MRA to publish a list of all VAT registered persons on its website on a quarterly basis to avoid fraudulent practices.

• Where a taxable person fails to submit a VAT return, MRA can publish its name, address, directors and taxable period for which the VAT return was not submitted 3 months after the due date. The taxable period will be notified prior to the publication. 

Objection made by taxpayer

• If the MRA lapses an objection due to failure to provide information, books and records within a required time frame, the taxpayer will not be able to produce those documents at the Assessment Revenue Committee (ARC) level. 

Agent to a principal

• A VAT registered agent to charge VAT on goods sold under consignment.

VAT refund on residential building, house or apartment 

• VAT refund to be effected no later than 30 days of receipt of all documents supporting an application. 

• To qualify for VAT refund, the covered construction area should not exceed 1,800 square feet.

VAT refund for small farmers

• VAT Refund Scheme available to small farmers with turnover less than Rs10m registered with the Small Farmers Welfare Fund.

Heir/legatee to a succession

• The heir/legatee of a deceased taxable person accepting the succession or any executor/liquidator of the estate deemed to be an agent of the deceased and liable to file VAT returns and pay VAT due with respect to VAT collected by the deceased.

• Succession taking over the business of a deceased taxable person required to register for VAT.

E-invoicing system

• MRA to implement a roadmap for phase-wise implementation of the e-invoicing system by December 2022 to enable online recording, authentication and monitoring of invoices issued.

VAT deduction on contracts

• Government ministries, departments and local authorities to withhold a percentage of VAT on contracts exceeding a certain threshold. The VAT withheld can be offset against additional tax payable by the VAT registered contractors when submitting VAT returns. 

Mauritius Revenue Authority (MRA) Act

Alternative Tax Dispute Resolution (ATDR) threshold

• The amount of tax payable under dispute in order to apply to the ATDR Panel reduced from Rs10m to Rs5m.

Arrears Payment Scheme

• The Arrears Payment Scheme under the Registrar-General’s Department will be re-introduced. The Scheme will provide for full waiver of penalties and interest if a debtor of the Department settles any debt amount on or before 31 March 2023.

• This scheme will apply to tax arrears due as at 31 May 2022.

Claim for Additional Duty or Tax on re-assessment

• No claim for additional duty or tax will be issued by the Registrar-General for an amount of less than Rs7,500 following a re-assessment of the value of an immovable property.

Transfer of shares by a non-citizen

• A non-citizen will be required to produce a certified copy of the certificate under the Non-Citizens (Property Restriction) Act on the acquisition and disposal of shares in a partnership, societe or a company.

Digital Signatures

• Provision will be made in the Registration Duty Act to accept a deed for registration where a secure digital signature has been affixed in conformity with the Electronic Transactions Act.