National Budget 2021/2022 - Fiscal Measures

Corporate Tax:

 

Tax holidays for family office, fund and asset managers

• Extension of income tax holiday for family offices as well as fund and asset managers from 5 to 10 years

 

Reduced income tax rate of 3% extended to 

• Companies engaged in the medical, biotechnology, and pharmaceutical sectors
• Private universities set-up in Mauritius

 

Dividend payment

• Dividend payment by a non-resident to another non-resident not taxable in Mauritius

 

Partial exemption extended to

• Licensed investment dealers
• Activities relating to the leasing of locomotives and trains including rail leasing

     

Tax Incentives to companies registered with the Economic Development Board ( EDB)

• Investment certificates (for companies engaged in specified sectors)
• Eight-year income tax holiday for new companies
• 5% tax credit over three years with respect to the capital expenditure incurred by manufacturing companies on new plant and machinery until 30 June 2023
• Export development certificate
• Income tax of 3% on export of goods
• Premium investor certificate
• Tax concessions to be negotiated with the EDB, subject to having a minimum investment level of MUR 500 million, except for pharmaceuticals

     

Double deductions available on :

• Acquisition of specialised software and systems
• Expenses incurred by private health institutions in relation to international accreditation

 

Transitional provision for double deduction available on qualifying R&D expenditure extended to June 2027

110% deduction on products manufactured locally by SMEs

 

Tax credit

• Full tax credit on the costs of acquisition of patents by biotechnology and pharmaceutical companies Contributions to COVID-19 Vaccination Programme Fund
• Contributions made by enterprises to the COVID-19 Vaccination Programme Fund to be allowed as deduction

 

Foundations and trusts

• Income tax legislation to be amended to ensure compliance with OECD standards, including substantial activity requirements from foundations and trusts benefitting from preferential tax regime

 

Advance Payment System (APS)

• Computation of tax under APS to cater for companies subject to a lower corporate tax rate than the standard rate of 15%

 

Investment tax credit

• Manufacturing companies allowed to carry forward unrelieved investment tax credit for a period of 10 years

 

Corporate Social Responsibility

• Exemption from payment of CSR by small enterprises eligible for presumptive tax at the rate of 1 percent of turnover
• Restoration of a building designated as a national heritage under the National Heritage Fund Act 2003 to be included on the list of specified priority areas of intervention for CSR purposes

 

Gambling levy

• Levy payable by gambling operators to be treated as non-deductible for income tax purposes

 

Personal Tax:

 

Premium Visa Scheme

• The holder of a Premium Visa, spending 183 days or more in Mauritius, to be taxed in Mauritius on a remittance basis
• Money spent in Mauritius through the use of foreign credit or debit cards by Premium Visa holders will not be deemed to have been remitted to Mauritius
• Income brought and deposited in a Mauritius bank account subject to tax, unless the holder declares that the required tax has been paid thereon in his country of origin or residence. The above amendments to the scheme to apply retrospectively as from 1 November 2020

 

Income tax exemption on emoluments of asset/fund manager

• Exemption on emoluments of asset/fund manager extended from 5 to 10 years

 

Additional exemption for child pursuing tertiary education

• Exemption with respect to a child pursuing tertiary education increased to MUR 225,000, and restrictions on place of study and income of household removed

 

Medical insurance relief

 Increase in relief for medical insurance premiums from:

• MUR 15,000 to MUR 20,000 for an individual and his first dependent
• MUR 10,000 to MUR 15,000 for other dependents

 

Contribution to individual pension scheme

• Exemption of up to MUR 30,000 on contribution to an individual pension scheme

 

Contributions to COVID-19 Vaccination Programme Fund

• Amount contributed by individuals to the COVID-19 Vaccination Programme Fund to be allowed as tax deduction upon submission of income tax return
• Carry forward of any unrelieved deduction by an individual allowed for two years

 

Self-employed assistance scheme

• The self-employed assistance scheme to apply only to self-employed individuals paying CSG as from 1 July 2021
• Submission of income tax returns by self-employed individuals required under the scheme
• MRA to provide simplified tax returns for self-employed individuals with income not exceeding the basic income exemption threshold

 

Value Added Tax :

• Zero-rating extended to:
• Plant, machinery, and equipment and purpose-built building and plant and equipment constructed by companies holding investment certificates for research and development in the field of health care, nursing, and residential care services
• Animals for the purpose of training, breeding, and re-export
• Preparation and supply of cooked or uncooked dumplings to final consumers

 

• VAT exemption -Exempt body of person extended to include:
• Developers for constructions made in the Biotechnology and Pharmaceutical industry
• The National Empowerment Foundation and the New Social Living Development Ltd with respect to social housing
• Holders of investment certificates registered with the EDB for the purchase of plant, machinery, and equipment and construction of purpose-built building and plant and equipment for research and development

 

Other taxes:

 

Land Transfer Tax and Registration Duty

• Tax on transfer of leasehold rights on state land reduced from 20 percent to 10 percent from 1 July 2021 for a period of two years for hotels
• Transfer of leasehold rights with respect to residential units developed on state land for senior living under the Property Development Scheme exempted from transfer tax
• Registration duty and land transfer tax exemption for:
• Developers in the biotechnology and pharmaceutical industry
• Construction and expansion of student campuses
• Registration duty exemption threshold for first-time buyers revised to first MUR 5 million of cost of a built-up residential property
• Registration duty exemption for businesses engaged in livestock production and animal breeding

 

Excise Duty

• Excise duty increased by 10% on alcoholic drinks and cigarettes
• Extension of excise duty rebate scheme on motor vehicles up to 30 June 2022
• Abolishment of 5% excise duty on electric vans of up to 180 kW used for the transport of goods
• Beneficiary of duty-exempted motor vehicle allowed to benefit from another duty-exempted motor vehicle within a period of four years, provided that the full amount of duties and taxes exempted on the current motor vehicle is reimbursed

 

Other measures

• Additional levy of MUR 2 per litre of Mogas and gas oil from 1 July 2021 to finance costs of COVID-19 vaccines
• An individual buying a house, apartment, or land to construct his residence in the financial year 2021/2022 to benefit from a refund of 5% of the cost of the property, up to a maximum of MUR 500,000
• An individual contracting a home loan to construct a residence to benefit from a refund of 5 percent of the home loan, up to a maximum of MUR 500,000

 

Tax Administration:

 

Income Tax Act

• Monetary thresholds for the submission of financial transaction statements by banks, non-bank deposit-taking institutions, insurance companies, and money changers reduced by half
• MRA empowered to request information from taxpayers electronically and conduct virtual meetings with taxpayers
• MRA to clarify through regulations the types of records to be kept by businesses at their premises
• Introduction of penalties for companies failing to comply with MRA requests relating to exchange of information
• Time limit of 30 days for issuance of income tax ruling to start from the date of receipt of all information requested by MRA

 

VAT Act

• Time limit of 30 days for issuance of VAT ruling to start from the date of submission of all documents and information requested by MRA

 

Customs Act

• Non-payment of duties and taxes by the due date under the Deferred Payment Scheme to attract penalty and interest

 

Mauritius Revenue Authority  Act

• Amendment to the MRA Act to compel attendance and production of documents before ARC by any person, including a retired Government officer
• Taxpayers allowed to make representations to the ARC without any payment, where objection was lapsed due to failure in producing requested information
• Alignment of definition of money laundering under the MRA Act with that of the FIAMLA
• Authorisation of the Independent Tax Panel not required for MRA to issue assessments for cases relating to fraud or non-submission of tax returns by the taxpayer