Introduction
On 27 July 2024,the Mauritian Parliament enacted the Finance (Miscellaneous) Provisions Act 2024 ("FA 2024"), which gives legal effectto the measures outlined by theHonourable Minister of Finance in the 2024-2025 Budget Speech.
The FA 2024 reflects the government's focus on fostering sustainable economic growth, promoting social equity, and enhancing climate responsibility. It addresses a range of national and global challenges while reinforcing Mauritius' commitmentto maintaining a robust economic structure, supporting key industries, and ensuring compliance with international standards. Key highlights include initiatives aimed at environmental sustainability, regulatory improvements, and targeted measures to alleviate inflationary pressures and fosterinclusive growth.
Below is a summary ofthe key business-related measures in the FA 2024. This summary is not exhaustive and should not be interpreted as legal advice.
01 | INCOME TAX ACT
The Introduction of a new Corporate Climate Responsibility levy of 2% of chargeable income of a company, which turnover exceed Rs 50M effective as from the year of assessment commencing 01 Jul 2024, i.e.to those entities with financial year ending after 31 December 2023. Entities benefiting from the partial exemption regime will have their effective tax rate increased from 3% to 3.4% and those not benefiting from partial exemption will now be taxed at 17%.
The following key tax incentive measures broughtto incentivize specific economic activities and provides for additional financialrelief are:
- The income tax exemption threshold forlump sum pension,retiring, or severance allowances is raised from Rs 2.5 million to Rs 3 million as from the 07 June 2024.
- Interestincome from bonds issued by public sector companies forinfrastructure projects becomes tax-exempt with approval from the Minister of Finance, Economic Planning and Development as from 01 Jul 2024.
- 100% of income from the sale of virtual assets and tokens is now exempted, similarto the exemption on sale of securities as from 01 Jul 2024.
- Income derived from intellectual property assets by a manufacturing company engaged in medical, biotechnology or pharmaceutical sector and holding an investment certificate will not be eligible forthe reduced tax rate of 3% as from 01 Jul 2024.
- The 10-yearincome tax holiday granted to a captive insurer will apply starting from the income yearin which the company starts its operation.
- Companies holding a Robotic and Artificial Intelligence Enabled Advisory Services license, issued by the FSC, can claim an 80% exemption subjectto meeting the substance requirements effective as from 01 Jul 2024 subjectto meeting the substance requirements.
- An investmenttax credit of 15% over 3 years will be granted on capital expenditure incurred in developing AI and patents as from 01 Jul 2024.
02 | UPDATED ON TAX AN VAT ADMINISTRATION
1. VAT invoices issued in currency otherthan MUR mustinclude the exchange rate used.
2. Taxpayers cannot submit an amended return if an objection has been raised with the tax authority orif a representation has been made to the Assessment Review Committee.
3. Itis now clarified that services provided by management companies to non-residenttrusts orfoundations will be zero-rated for VAT.
4. Itis now clarified that Exemptions forlicensed CIS Administrators do not apply to administrative service income provided by management companies to CIS license holders.
5. The Tax Arrears Payment Scheme is extended for another year, offering full waiver of penalties and interestif tax arrears are paid by March 31, 2025, and the taxpayerregisters by December 31, 2024. The effective date of unpaid tax liabilities is pending announcement.
03 | FINANCIAL CRIMES COMMISSION ACT 2023
Previously, "Sporting Event" meant a horse race orfootball league which takes place outside Mauritius. This definition has now been amended to include horse races orfootball matches which take place in Mauritius as well.Hence,the new definition of "Sporting Event" is "a horse race orfootball match which takes place in, or outside, Mauritius".
Section 35, paragraph (a) which is about corruption in relation to sporting events has been amended to replace "sport event" with "sporting event".
Section 57 regarding preliminary investigation by Commission has been amended at subsection (2)to remove the Asset Recovery and Management Division such that only the Director ofthe Investigation Division shall, within 30 working days of a referral made under subsection (1) or within such other period as the Commission may direct.
Subsection (1) of section 80 regarding the determination of value of benefit has been amended to include Section B of Sub-partII of Part V and Section B of Sub-partIII of Part V which are Criminal ConfiscationOrder and Civil Confiscation Orderrespectively.
Section 95 (1) has been amended to include not only properties but also any benefit derived orlikely to be derived from properties which are believed by the Commission to be proceeds, an instrumentality or a terrorist property when making an application to the Courtforthe issue of a Civil ConfiscationOrder.
Section 96 (1) has been amended to include not only a terrorist property but also an amount equalto the value of a benefit derived from such property in relation to the issue of civil confiscation orders.
A new subsection has been added after subsection (2) of Section 168 regarding other savings and transitional provisions to stipulate that where the Commission detects an offence which may have been committed under any of the repealed enactments priorto 29 March 2024,the Commission will have allthe powers conferred underthe Financial Crimes Commission Act 2023 to investigate and prosecute that offence.
04 | THE FINANCIAL REPORTING ACT
"Public Interest Entity" has been amended such that the definition does notinclude a Global Business Corporation or an Authorised Company underthe Financial Services Act
A new section has been added after section 69 in regard to registration of public interest entities. All public interest entities specified in the First Schedule is required to apply forregistration to theNational Committee on Corporate Governance and such application is to be made in such form and manner and should be accompanied by such fee, as may be prescribed.
05 | THE FINANCIAL SERVICES ACT 2007
A number of amendments have been made to the FSA and several new sections have been added.
Subsection 2 has been repealed and now any information required under subsection (1) shall be submitted to the Commission within 15 days of such request.
New sections have been inserted after Section 17 to provide clarity on how the Commission will now process applications.
Under section 17A,the Commission will deem an application to have been withdrawn where the application does not satisfy the requirements referred to in section 16 ofthe FSA or provided in any guidelines issued by the Commission or where the applicant has not submitted information as required under section 17 ofthe FSA to the satisfaction ofthe Commission.
As per section 17B, upon receipt of an application under any relevant Act,the Commission will determine whetherthe application is complete, and the Commission will grantthe application within 10 working days from the date the application is determined to be complete.
Section 17C clarifies that sections 17A and 17B shall apply to an application forthe grant of a Global Business Licence and an application for authorisation as an Authorised Company but section 17B does not apply to:
- any application submitted priorto 1October 2024;
- any application for a licence specified in the Second Schedule to the Virtual Asset and Initial Token Offering Services Act 2021;
- any application forregistration to carry outthe business of initialtoken offerings underthe Virtual Asset and Initial TokenOffering Services Act 2021; and
- any other application or matter as may specified in FSC Rules.
A new section is added at 22B to caterfor post licensing fees where a licensee shall be required to pay to the Commission such postlicensing fees as may be specified in the FSC Rules for any post licensing request as required underthe relevant Acts.
Section 25A is a new section which provides forthe process for application of duplicate licence, section 25B provides forthe process forthe notification of change of name and section 25C confirms to whom sections 25A and 25B apply.
A new subsection aa has been added after section 29(5) which requires every qualified trustee to provide any information maintained by them under section 29(5)(a)the Commission upon request.
Section 31(1A) has been added to provide clarity on advertisement whereby any advertisement proposed to be published under section 31(1), shall be submitted to the Commission notlaterthan 7 working days priorto the date ofthe first publication. Where on receipt of a copy ofthe advertisement,the Commission is not satisfied with the advertisement, the latter shall, before the date ofthe first publication,require the licensee to amend, withdraw orrefrain from publishing the advertisement.
The definition of Investigators has been amended to now also include the Chief Executive.
Section 53 (1)(a)(iii) has also been amended to provide thatthe Chief Executive may refer a matter to the Enforcement Committee when he had reasonable cause to believe that a licensee is committing or has committed a financial crime.
A new section has been inserted at 71(3)(a) (aa) which provides thatNotwithstanding section 72(1) (a), an application from the holder of a Global Business Licence to appoint a new management company shall be accompanied by such fees as may specified in the FSC Rules.
A new provision has been added to section 71A(7)(b) which requires an application by an Authorised Company to appoint a new registered agentto be accompanied by such fees as may be specified in the FSC Rules.
Section 71A (10) now makes it clearthat an Authorised Company shall file with the Commission, once in every year, but notlaterthan 6 months after the close of its financial year.
A new section has been added at 73A regarding directions. The Chief Executive may now issue a written direction to a Global Business Corporationas he deems appropriate in the circumstances, forthe purpose of protecting the good repute of Mauritius as a centerforfinancial services, if he has reasonable grounds to believe thatthe Corporation has contravened oris likely to contravene a relevant Act, is conducting its affairs in an improper manner oris involved in a financial crime.
Any direction issued by the Chief Executive may specify the time by which, orthe period during which, it shall be complied with.
A Global Business Corporation shall comply with any direction issued notwithstanding anything in its constitution, or any contract or arrangementto which itis a party.
In regard to the above,the Chief Executive will notissue any direction before giving the person to whom itis to be addressed a reasonable opportunity to make representation on the matter.
Where the Chief Executive considers that any delay in issuing the direction may cause severe prejudice to the reputation ofthe Global Business Corporation,the public orthe financial services industry, he may issue a direction which willtake effectimmediately and shall give the Global Business Corporation the opportunity to make representations as soon as practicable, but notlaterthan 7 days from the date the direction is issued.
The Chief Executive may revoke a direction issued at any time by written notice to the Global Business Corporation.No person shall knowingly hinder or prevent compliance with the direction otherwise,the latter shall commit an offence.
These directions which are applicable for Global Business Licenses shall also be applicable in the same way for Authorised Companies.
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