Mauritius - new tax measures come into force



The Finance Act 2019 enacted on 25 July 2019 introduced a number of new fiscal measures. Some of the measures of general interest are highlighted below.

(a) Voluntary Disclosure of Income Scheme – Foreign Assets

Through this Scheme, a person making a voluntary disclosure, on or before 31 March 2020, of his undeclared income derived from Mauritius but held offshore in bank accounts or used to purchase assets offshore will benefit from free penalty and interest on payment of tax on such income.

(b) Business Facilitation - Presumptive tax system for small enterprises

A presumptive tax system for small enterprises with gross income not exceeding Rs 10 million and operating in specific business activities has been introduced. The small enterprises opting for such system will pay a presumptive tax at the rate of one per cent of its gross income.

(c) Mauritius going Green - Fast charger for electric car investment allowance

An individual who acquires a fast charger for his electric car may deduct from his net income, the expenditure so incurred for the acquisition of the charger.

(d) Improving Business Environment - Deduction for expenses incurred for arbitration, conciliation or mediation under an Alternative Dispute Resolution Mechanism

A company may claim deduction in respect of filing fees equivalent to 150% of the expenditure so incurred while making an application for arbitration, conciliation or mediation for the settlement of a dispute before a recognized arbitration institution in Mauritius.

(e) Admissibility of documents produced by computer

The tax legislation has been amended to provide for admissibility of documents generated by a computer, as evidence of any fact stated therein, in Court.

(f) Anti-abuse Rule

With a view to minimize the possibilities of tax avoidance, Mauritius is introducing Controlled Foreign Company (CFC) rules.

(g) Enlarging the scope of VAT repayment

Previously, a VAT registered person was able to claim repayment of input tax in respect of capital goods such as building including renovation and extension, plant, machinery or equipment. The VAT Act has now been amended to allow claim for repayment of VAT paid on intangible assets of a capital nature being –

(i) goodwill on the acquisition of a business or part of a business; or

(ii) computer software, patents or franchise agreements.