The Finance (Miscellaneous Provisions) Act (the “Finance Act”) was officially gazetted on 2 August and the provisions are deemed to come into operation 2 August (except as otherwise specified in the Finance Act) to implement the measures announced in the Budget Speech 2022-2023 presented on 7 June 2022. This highlight covers the key amendments made by the Finance Act.

A. Companies

Companies Act 2001

The extension provided to companies due to the Covid-19 pandemic has been removed and the following requirements have been reinstated for companies:

• To call annual meetings of shareholders not later than 6 months after the balance sheet date.
• To prepare financial statements within 6 months after balance sheet date; and
• To file of financial statements with the Registrar of Companies (ROC) within 28 days from the date such financial statements have been signed, or such other period as maybe determined by the ROC.Private companies having a turnover of less than MUR 100 million in respect of their last preceding accounting period will now qualify as ‘small private companies’ (previous threshold was less than MUR 50 million).Small private companies having annual turnover not exceeding MUR 100 million may file a financial summary with the Registrar (previous threshold was less than MUR 20 million) and will be exempted to file annual returns unless there is a change in shareholding or board composition or related matters. To note that the provisions relating to small private company does not apply to Global Business or Authorised Companies.In relation to filing of particular of charges with the Registrar of Companies, the requirement to ‘certify’ the instrument evidencing the creation of the charge has been removed.The duty incumbent on a director to call for appointment of a liquidator to an insolvent company which was suspended during the COVD 19 period, has now been reinstated.Highlights of the Mauritius Finance Act 2022- August 2022Page 1 of 12Disclaimer: Please note that not all the amendments have been listed above and this note does not constitute legal or other professional advice.

Companies required to prepare group financial statements shall disclose the following information with respect to subsidiaries in their annual reports:

1. particulars of interest.
2. donations made by the subsidiaries.
3. details of present and past directors.
4. fees payable to auditors; and
5. details of major transactions. This requirement does not apply to holders of Global Business licences and Authorised Companies, as exempted under the Act.

Redomiciliation of companies in and out of Mauritius:

The Registrar of Companies (‘ROC’) shall now issue a conditional certificate of registration in respect of domiciliation of a company from a foreign jurisdiction to Mauritius until such company is deregistered from its original place of incorporation/registration.

The ROC will enter the name of the company on the register upon receipt of the certificate of registration. Subsequently, the ROC will issue a certificate of registration as from the date of such deregistration.

The ROC will remove a company which has redomiciled from the register upon receipt of its certificate of registration from the foreign jurisdiction.

Removal from the registers of company:

There are now two distinct grounds for the ROC to remove a company from the register:

• where a company has ceased to carry on business; or
• where there is no reason for a company to continue to exist.

Highlights of the Mauritius Finance Act 2022- August 2022

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Disclaimer: Please note that not all the amendments have been listed above and this note does not constitute legal or other professional advice.

B. Financial Services Sector Financial Services Act (‘FSA’)

Global headquarters administration, global shared services and global treasury activities will no longer be considered as Financial Business Activities and will be referred to as “Global Activities”, nonetheless the application of the Global Activities licence remain subject to the regulation of financial services under Part IV of the FSA.

Any person acting as an officer of a licensee, but whose appointment has not been approved by the FSC shall remain liable for any offence committed under the relevant Acts defined under the FSA. The FSC may further initiate disciplinary proceedings under the FSA against any person acting as officer of the licensee whose appointment has not been approved.

A Settlement Committee will be established to determine possibility for early resolution of disciplinary matters with a licensee and the Committee may exercise the disciplinary powers of the FSC to impose administrative sanctions on licensees.

Financial Intelligence and Anti-Money Laundering Act 2002

The Finance Act has replaced the term “terrorism financing” to expand it to “terrorism financing and proliferation financing”.

Financial Reporting Act

The definition of “professional services” in relation to a professional accountant has been amended and will include inter alia, insolvency services, forensic accounting, fund accounting, tax advisory services and representing a client with tax authorities.

A Public Interest Entity (PIE) may be exempted from the statutory requirements in relation to the preparation of its financial statements/group financial statement or its annual report and may make such request to ROC in accordance with the Companies Act.

Highlights of the Mauritius Finance Act 2022- August 2022

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Disclaimer: Please note that not all the amendments have been listed above and this note does not constitute legal or other professional advice.

The Limited Partnerships Act

The Limited Partnerships Act is amended to accommodate the nomination of at least one office resident in Mauritius who will be authorised to provide, upon request by any competent authority, all basic information on, including information on beneficial ownership of, the limited partnership.

Securities Act

• the Official Exchange has been empowered to investigate market abuses, including insider dealing and fraudulent behaviour by market participants and issuers on the Official Exchange.
• an audit firm cannot audit the financial statements of a CIS manager or a collective investment scheme, without the prior approval of the FSC and it will determine whether the audit firm has adequate experience, expertise and resources to audit the financial statements of a CIS manager or collective investment scheme prior to providing its approval.Virtual Assets and Initial Token Offering Services Act 2021

• the FSC and investigatory authorities can make use of software/digital tools in carrying out supervision and investigation; and
• information obtained by the FSC and investigatory authorities from such software/digital tools to be admissible as evidence for purposes of a criminal investigation, prosecution or other related criminal or civil court proceedings.Foundations and Trusts

• Effective from date gazetted, MRA may request information from a foundation or trust in order to make an assessment, collect tax or comply with any request for the exchange of information under a Double Taxation Avoidance Agreement.

Highlights of the Mauritius Finance Act 2022- August 2022

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Disclaimer: Please note that not all the amendments have been listed above and this note does not constitute legal or other professional advice.

C. Value Added Tax Act

The Value Added Tax Act is amended to allow for the following:

• Effective as from 3 October 2022, MRA is empowered to register a person who is required to be compulsorily VAT registered but fails to do so. The MRA shall allocate the person a VAT registration number and issue a VAT certificate. MRA will publish a list of all VAT registered persons (name, trading name, BRN and VAT registration number) which will be updated on a quarterly basis.
• Where a taxable person fails to submit a VAT return, MRA can publish its name, address, directors and taxable period for which the VAT return was not submitted 3 months after the due date. The taxable person will be notified of the MRA’s intention to make a publication unless the VAT return due is filed within 7 days of the date of the notice.
• MRA will implement an e-invoicing system which will allow businesses to connect to the system and issue fiscal invoices to customers. The fiscal invoice shall bear such data or mark to confirm that it has been duly registered on the e-invoicing system.
• Effective as from 3 October 2022, the heir/legatee of a deceased taxable person accepting the succession, or any executor/liquidator of the estate will be deemed to be an agent of the deceased and liable to file VAT returns and pay VAT due with respect to VAT collected by the deceased.D. Corporate Taxation

• Effective from the date gazetted, a company forming part of an MNE group which is liable to a Top-up Tax in a year, may be required by the Director-General to compute and pay a Qualified Domestic Minimum Top-up Tax in such form and manner as may be prescribed.
• Top-up Tax and Qualified Domestic Minimum Top-up Tax shall have the same meaning as in article 10 of the GloBE Rules as approved by the Inclusive Framework on BEPSHighlights of the Mauritius Finance Act 2022- August 2022Page 5 of 12Disclaimer: Please note that not all the amendments have been listed above and this note does not constitute legal or other professional advice.

• The provision on transfer of assets to related companies at base value has been extended to include any assets of a capital nature and not limited to plant, machinery or industrial premises.
• Effective from date gazetted, the MRA will be allowed to publish on its website the names of non-filers.E. Tax HolidaysAs from year of assessment starting on 1 July 2023, an 8-year tax holiday will be granted to the following entities:

• newly set up freeport operators or private freeport developers with an investment of at least MUR 50 million provided that the companies start operations on or after 01 July 2022 and satisfy prescribed conditions in relation to their substance.
• person engaged in sustainable agricultural practices and registered with the Economic Development Board.F. Angel Investors

• As from income year commencing on 1 July 2022, tax deduction equivalent to 50% of amount invested by angel investors (with a minimum of MUR 100,000) to the seed capital of qualifying start-up SMEs by way of acquisition of shares, subject to prescribed conditions.
• Any unrelieved tax deduction can be carried forward and deducted against the net income of the 2 succeeding years. Total tax deduction available to angel investors in an income year capped at MUR 500,000. In case of disposal of the equity investment within 36 months of the acquisition date, the tax deduction claimed will be clawed back and brought to tax in year of disposal.Highlights of the Mauritius Finance Act 2022- August 2022Page 6 of 12Disclaimer: Please note that not all the amendments have been listed above and this note does not constitute legal or other professional advice.

G. Employees and personal taxation Worker’s Rights Act 2019
The Workers’ Rights Act has been amended to:

• protect a person other than a consultant, who is classified by an employer as a freelance or a service provider, whilst he personally performs a duty which is of the same or similar nature to a worker, by giving that person the status of a worker or an atypical worker.
• provide that when a cyclone class III or IV is in force, a worker who is required to work from home, or any other place where he has been assigned duty or to stay at his place of work be also entitled to the cyclone allowance and that the allowance will not be payable to a person drawing more than Rs 600,000 in a year.
• introduce a new provision regarding leave to take care of a sick child, whereby a worker can avail himself of up to 5 days from his paid leave entitlement to be reckoned against his annual leave, sick leave or vacation leave, at his option, to take care of his sick child.
• provide for such category of workers as may be prescribed to be eligible to the payment of additional remuneration to compensate for increase in cost of living.
• provide that where a worker, irrespective of his salary, is paid a petrol allowance, the allowance be increased by 10 %, up to a maximum of Rs 2,000 in a month.remove the ceiling of 90 days to accumulate untaken sick leave.
• provide that rate of contribution made by an employer on behalf of his workers to a private pension scheme shall not less than the prescribed PRGF rate.
• clarify the notional calculation for a part time worker for the purpose of computation of retirement gratuity.
• provide a definition of sexual harassment which forms part of violence at work provisions.Highlights of the Mauritius Finance Act 2022- August 2022Page 7 of 12Disclaimer: Please note that not all the amendments have been listed above and this note does not constitute legal or other professional advice.

• provide that payment of food allowance be also extended to workers employed on shift or otherwise and whose normal hours of work in a day exceeds 10 hours.
• provide that where a worker has sustained an injury out of and in the course of his work and a Government Medical Practitioner has certified that he has not fully recovered from the injury, his employer cannot dismiss him on ground of performance.
• provide that a worker can voluntarily retire before the age of 60 where he has already completed 436 months’ service.
• regarding disciplinary proceedings, in addition to giving written explanations to a charge of misconduct or poor performance, the employee can also be given an opportunity to answer a charge in an oral hearing.
• In relation to the Portable Retirement Gratuity Fund, it has been clarified that:in relation to contribution for past services, (i) where a worker’s employment is terminated, the contributions for past services must be paid as from the date of commencement of the employment with the employer and (ii) where worker who has resigned, the contribution for past services should be paid for period commencing on 01 January 2020. The payment must be made to the Director-General not later than one month after the date of termination of employment or the date of resignation of the worker.
• For the gratuity payment, for the period starting from the date of employment and until up to 2 months prior to the date of retirement, 90% of the value of the accumulated fund must be paid on the date of retirement. The balance is to be paid 2 months following the retirement of the worker.

Highlights of the Mauritius Finance Act 2022- August 2022

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Disclaimer: Please note that not all the amendments have been listed above and this note does not constitute legal or other professional advice.

Income Tax Act

The Workers’ Rights Act has been amended to:

• Employees (both employed and/or self-employed) deriving monthly total aggregate income not exceeding MUR 50,000 are eligible to receive a monthly income allowance of MUR 1,000 (including 13th month) for the period July 2022 to June 2023, subject to meeting the eligibility criteria. The income allowance is also available to non-citizens registered with the MRA for the payment of social contributions.
• As from income year commencing on 1 July 2022, applicable tax rates will depend on a person’s annual net income derived, as follows:

 

Individuals earning annual net income of:

MUR 0 – 700,000
MUR 700,001 – 975,000 More than MUR 975,000

Tax payable at:

10%
12.5%
15% (plus Solidarity levy if applicable)

     

• The section on Tax credit of 5% available to individuals with total annual net income in an income year not exceeding Rs700,000 has been repealed.

Highlights of the Mauritius Finance Act 2022- August 2022

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Disclaimer: Please note that not all the amendments have been listed above and this note does not constitute legal or other professional advice.

H. Real estate sector
Non-Citizens (Property Restriction) Act

• New insertions have been made to the Non-Citizens (Property Restriction) Act 1975 whereby the express authorisation of the Minister of Internal Affairs is now required for the winding-up of a “qualified entity”, which has been redefined as an entity that owns property in Mauritius and in which a non-citizen directly or indirectly owns or controls all interests.
• The legislation had previously been amended to provide for a control of property ownership in Mauritius, most specifically, acquisition and disposition of property by non-citizens. The new amendments will entail an even tighter grip on the control of property ownership in Mauritius by non-citizens.
• Other significant amendments include the power of the Curator of Vacant Estates to possess property and cause such property to be sold, in the event of a transfer of property in breach of section 3 of the Non-Citizens (Property Restriction) Act 1975 (including failure to obtain the relevant consent of the Prime Minister’s Office).
• However, the term “transfer” has not been defined and it remains to be seen what exactly the term will be deemed to include in addition to the purchase and acquisition of property.
• The threshold for acquiring property as a foreigner remains at USD 375k to qualify for a permanent resident permit, however fractional ownership now allows for an expat to purchase, together with other persons, immovable property under IRS, RES IHS, PDS, Ground plus 2, or Smart City Scheme, provided that his contribution is USD 375k and he qualifies to apply for permanent residence for himself and his dependents.

Highlights of the Mauritius Finance Act 2022- August 2022

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Disclaimer: Please note that not all the amendments have been listed above and this note does not constitute legal or other professional advice.

• The Non-Citizens (Property Restriction) Act is amended at Section 3 to include a paragraph which, in short, allows for a non-citizen who is a resident pursuant to the Immigration Act 2022, may purchase or otherwise acquire with the approval of the Minister, a residential property subject to exclusions and bareland or serviced land exceeding 0.5276 hectares (1.25 arpent) or standalone property constructed on an extent of land exceeding 0.5276 hectares (1.25 arpent), provided the purchase price is not less than USD 350k.

The Registration Duty Act 1804

• The Home Ownership Scheme has been extended for another year whereby a refund of 5% of the declared value of a property which qualifies under the scheme is paid to the purchaser where the deed of transfer of that property has been signed and registered during the period starting on 12 June 2021 and ending on 30 June 2023.
• Further, the Home Loan Payment Scheme has also been extended so that a disbursement of 5% (up to a maximum of MUR 500,000) shall be paid to an eligible borrower by the Registrar General, where the deed witnessing a loan has been signed and registered during the period starting on 12 June 2021 and ending on 30 June 2023.Land (Duties and Taxes) Act amendedEffective as from 1 January 2023, any acquisition by a company, holding immovable property or leasehold rights in state land, of its own shares by way of redemption, share buyback or in any other manner resulting in a change in ownership of that company, will be subject to registration duty and land transfer tax.

Highlights of the Mauritius Finance Act 2022- August 2022

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Disclaimer: Please note that not all the amendments have been listed above and this note does not constitute legal or other professional advice.

I. Other taxes
Tax Deducted at Source (“TDS”)

Effective from date gazetted, the TDS rate has increased as follows:

 

Category

Professional services Rent

New TDS rate

3% to 5% 5% to 7.5%

Effective from date gazetted, 3% TDS now applicable on the following:

• Consultancy fees
• Security services and cleaning services
• Pest management services
• Payment of fees made by insurance companies to motor surveyors and mechanics forrepairs of motor vehicles of policy holdersExcise ActThe Excise Act has been amended to include a section allowing a person who has, during the period starting on 1 July 2022 and ending on 30 June 2023, purchased an imported electric motor car or electric motor vehicle for the transport of goods to make a claim to the Director- General for an amount being the lower of 10 per cent of the value at importation or MUR 200,000.Highlights of the Mauritius Finance Act 2022- August 2022Page 12 of 12Disclaimer: Please note that not all the amendments have been listed above and this note does not constitute legal or other professional advice.