Contribution Sociale Généralisée not applicable to non-citizen employees who are not tax resident
On 7 April 2021, the Contribution Sociale Généralisée (“CSG”) Regulations 2020 has been amended to exclude a non-citizen employee who is not a resident of Mauritius under section 73(1)(a) of the Income Tax Act (“ITA”).
Under the ITA, a person is considered to be a tax resident in Mauritius if he:
- has his domicile in Mauritius unless his permanent place of abode is outside Mauritius;
- has been present in Mauritius in an income year, for a period of, or an aggregate period of, 183 days or more; or
- has been present in Mauritius in an income year and the 2 preceding income years, for an aggregate period of 270 days or more.
As such, CSG no longer applies to any non-citizen employee who does not meet the above tax residency conditions under the ITA. The amendment to the CSG Regulations applies retrospectively and is deemed to have come into operation on 1 September 2020.
It comes as a relief to employers with a reduction in their employment costs but also to the non-citizen employees who would not have benefitted from these pension contributions, unless they were to retire in Mauritius. The employers as well as employees would be able to apply for a refund to the Mauritius Revenue Authority (“MRA”) for CSG contributions made since 1 September 2020.
What is CSG?
With the changes brought by the Finance (Miscellaneous Provisions) Act 2020, the CSG has been introduced and is applicable as from the month of September 2020. This new system of social contributions replaces the National Pensions Fund (NPF).
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