Taxation


Among all the measures announced in the Budget 2019-20, we analysed the impact on the tax areas ranging from corporate to personal tax and immigration.


Browse through the latest tax updates

Corporate Tax Personal Tax Income Exemption Threshold Value Added Tax Other Tax Immigration

Corporate Tax

Levy on Companies

  • Companies or group of companies having gross income exceeding Rs500m will be subject to levy on their annual gross income as follows:

     

     

  • No levy applicable to companies holding a Global Business Licence and companies in the tourism sector.

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Solidarity Levy on Telephony Service Providers

  • Solidarity Levy on telephony service providers will be made permanent 
  • Profitable companies will continue to be liable to levy at 5% of accounting profit + 1.5% of turnover

  • Non-profitable companies will now be liable to levy of 1.5% of turnover

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Alternative Minimum Tax (AMT) on life insurance business

 

  • Companies carrying out life insurance business will be liable to tax under the existing system or under AMT, whichever is the higher

  • AMT will be calculated at 10% on the profit attributable to shareholders adjusted for capital gains or losses

 

 

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Accelerated Depreciation

Accelerated depreciation available on assets acquired as follows:

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Investment Tax Credit (“ITC”)

  • 15% ITC available to all manufacturing companies over 3 years

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Export incentives

 

 

  • 50% refund on the costs of certification, testing and accreditation of local laboratories

 

 

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Additional Tax Deduction

  • Double deductions on: 
    • Plant and machinery acquired by companies affected by COVID-19 during the period 01 March 2020 to 30 June 2020 
    • Cost of acquisition of patents and franchises including associated costs to comply with international quality standards and norms
    • R&D expenditures incurred by Medical R&D centres

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Tax Holidays

Double deductions on: 

 

  • 8 year tax holiday for companies engaged in:
    • Inland aquaculture scheme
    • Manufacture of nutraceutical products subject to operations started on or after 04 June 2020
    • Manufacture of pharmaceutical products, medical devices or high-tech products if the company has started operations on or after 08 June 2017
  • Worldwide institution setting up branch campuses in Mauritius will also benefit from the 8 year tax holiday

 

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Partial Exemption Regime

  • 80% partial exemption regime on interest income does not cover the following:
    • Non-bank deposit taking institutions;
    • Money changers;
    • Foreign exchange dealers;
    • Insurance companies; 
    • Leasing companies; and
    • Companies providing factoring, hire purchase facilities or credit sale facilities

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Deferred Duty and Tax Scheme

  • Companies under the Deferred Duty and Tax Scheme and the Mauritius Duty Free Paradise will be allowed to sell their goods on the local market provided they pay taxes

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Personal Tax

Contribution Sociale Generalisee (CSG)

  • Introduction of CSG with first payment of benefits in July 2023 to ensure an additional guaranteed monthly income to citizens above 65 years

  • Effective as from 01 September 2020, contributions payable under the CSG system are as follows on:
    • Monthly salary up to Rs50,000 - 1.5% by employee and 3% by employer
    • Monthly salary exceeding Rs50,000 - 3% by employee and 6% by employer
    • Introduction of CSG will lead to the abolishment of the National Pension Fund (NPF), however, the NPF will continue to pay benefits to those who have previously contributed to the fund

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Solidarity Levy

  • Effective from income year 2020-2021, increase in solidarity levy from 5% to 25% on chargeable income plus dividends in excess of Rs3m, excluding lump sum income (pension, death gratuity and death or injury compensation)
  • PAYE system will apply to collect the solidarity levy

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Deduction for dependent

  • In addition to the annual income exemption threshold, a taxpayer may now claim a deduction for a bedridden next of kin in his care
  • Deduction between Rs80,000 to Rs110,000 available provided the number of dependents does not    exceed 4

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Income Exemption Threshold

Effective as from income year starting on 01 July 2020:

 

Category

From 

(Rs)

To 

(Rs)

Increase 

(Rs)

A. Individual with no dependent

310,000

325,000

15,000

B. Individual with one dependent

420,000

435,000

15,000

C. Individual with two dependents

500,000

515,000

15,000

D. Individual with three dependents

550,000

600,000

50,000

E. Individual with four or more dependents

600,000

680,000

80,000

F. Retired/disabled person with no dependent

360,000

375,000

15,000

G. Retired/disabled person with dependents

470,000

485,000

15,000

Value Added Tax

Digital and Electronic services

  • Non-residents providing digital and electronic services through internet for consumption in Mauritius will be subject to VAT

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Pharmaceutical industry

  • VAT exemption for medical research & development centres on construction materials and specialised equipment

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Blue Economy

  • Inland aquaculture scheme exempt from VAT and duty on equipment

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Education

  • International educational institutions will benefit from VAT exemption on IT and IT related materials and equipment used for online education

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Construction Sector

  • Payment of VAT from date of receipt instead of date of invoice allowed for Government contracts in relation to construction works

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From exempt to zero-rate

  • The following exempt items will become zero rated supplies:
    • Unprocessed agricultural and horticultural produce
    • Live animals of a kind generally used as, or yielding or producing, food for human consumption other than live poultry
    • Transport of passengers by public service vehicles excluding contract buses for the transport of tourists and contract car; and
    • Medical, hospital and dental services

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Other Taxes

Excise Duty

  • As from 05 June 2020, excise tax on sugar sweetened products will be doubled to 6 cents per gram and extended to specified locally manufactured and imported non-staple sweetened products

  • A rebate on the amount of customs/excise will be granted on vehicles, provided they were in bonded warehouse before 05 June 2020 and are cleared from Customs before 30 June 2021.

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Customs Duty

  • Exemption value of article imported by post or courier services reduced from Rs3,000 to Rs1,000.

  • Rate of customs duty on import of sugar will be increased from 80 percent to 100 percent.

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Increase in duties and taxes on gambling

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Property Tax

  • The scheme regarding exemption from registration duty on acquisition of a newly-built dwelling will be extended to 30 June 2022 and value of the property will be raised to Rs7m. The exemption will also cover purchases on the basis of a plan or during construction but has certain exclusions

  • Exemption from land transfer tax to a promoter undertaking construction of housing projects of at least 5 residential units for Mauritians will be extended to 31 December 2020. No registration and land transfer tax will be payable on the transfer of freehold bare land for the construction of housing projects provided the land is transferred by 31 December 2020 and construction completed by 31 December 2021. Exemption of land transfer tax will be granted on sale of residential unit  made to a Mauritian before 30 June 2022.

  • A person is now eligible to first-time buyer registration duty exemption if he or his spouse is or was the:
    • owner of an immovable property acquired by inheritance where the land is less than 20 perches
    • co-owner of an immovable property acquired by inheritance where their share in that property is less than 20 perches of land

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Tax Administration

General

  • Tax Account Number (TAN)

Each citizen will automatically receive a TAN

  • Assessment Review Committee (ARC)

Where an aggrieved taxpayer repeatedly fails to attend or to be represented upon convened, the ARC will strike out the case if such failure is not due to illness or other reasonable cause

  • Acquisition of residential unit from National Empowerment Foundation (NEF) 

Exemption from payment of registration duty on acquisition of a residential unit from the NEF by an individual who is registered on the Social Register of Mauritius

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Income Tax

  • Income tax refund by the MRA

Time limit to effect income tax refunds standardised to 60 days for all taxpayers as from the date all necessary documentation pertaining to the application is received by the MRA

  • E-services platform

MRA to further develop its e-services platform to improve efficiency and transparency in service delivery to taxpayers 

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Value Added Tax

  • Market value of the supply will be taken as the taxable value where a transaction is not at arm’s length

  • VAT-registered person making both taxable and exempt supplies may apply for an alternative basis to apportion input tax where he is engaged in a project spanning over several years
     

  • Administrator, executor, receiver or liquidator to inform the MRA within 15 days of his appointment for the management or winding up of the business of a taxable person

  • Provisions will be made to allow a claim for VAT refund below Rs25,000 in respect of a residential building subject to the amount of VAT paid during a quarter and preceding three quarters does not exceed Rs25,000

  • Introduction of a VAT e-invoicing at business level on a pilot basis

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Customs

  • Principal Officer of a private company (may be the executive director or any other person who is entitled to exercise the powers of the Boards of directors) will be liable for any taxes due by the company

  • The time frame of 28 days to settle underpayment of duties, excise duties, taxes and penalties by an importer/manufacturer extended to cover the following:

    • default on deferred payment facilities

    • non-submission of cargo report for an aircraft or ship

    • importation of selected prohibited goods

  • Goods imported in multiple consignments or shipments to be assembled into a complete finished good such as a photovoltaic system or a greenhouse will be classified under the same category as the finished products for tariff purposes

  • Customs declarations (Bill of Entry) made in respect of imports will be deemed to be a self-assessment

  • A penalty Rs500 per day of non-compliance up to a maximum of Rs5000 will be imposed on master, owner or duly authorised agent of an aircraft or ship failing to give a cargo report in respect of the aircraft or ship, its craft and passengers. 

  • Qualified person from a Freight Forwarding Agent company will be authorised to act as broker by the MRA

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Suspected cases of infringement of industrial rights

  • Public notice will be given where the MRA customs suspends the clearance of imported goods or detains goods on the local market 

  • No future suspension of the clearance of imported goods or detention of goods on  local market will be made by the MRA unless and until the right holder initiates legal proceedings

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Customs Tariff

Rate of exchange to be used for valuation purposes will now be posted on the MRA’s website

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Immigration

Investments

  • Initial investment of USD100,000 required to be eligible for an Occupation Permit as investor has been reduced to USD50,000
  • Minimum investment of USD40,000 required to be eligible for an Innovator Occupation Permit is being removed as well as the minimum turnover requirement

  • Holders of Occupation Permits (OP) and Residence Permits as Retired Non Citizens will not have any shareholding restrictions to invest in other ventures

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Duration of Permits

  • Occupation Permits and Residence Permits as Retired Non Citizens can be applied for a maximum period of 10 years renewable

  • Permanent Residence Permit will be valid for 20 years 

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Dependents

  • No permit is required for the spouse of an OP holder to be able to invest or work in Mauritius
  • Parents of OP holders will be allowed to live in Mauritius

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Non-Citizen Professionals

  • Minimum monthly salary of Rs30,000 for ICT professionals to obtain an Occupation Permit will be extended to other sectors
  • Work Permit and Residence Permit will now be issued as one permit instead of two separate documents

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Administration

  • Occupation Permit applications will be determined and recommended by the Economic Development Board only

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Contact us

Anthony Leung Shing

Anthony Leung Shing

Country Senior Partner, PwC Mauritius

Tel: +230 404 5071

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