- September 1, 2021
- Posted by: audrey
- Category: Tax Relief
Briefing note on the Finance (Miscellaneous Provisions) Act 2021 – Mauritius
The Finance (Miscellaneous Provisions) Act (the “Finance Act”) was gazetted on 05 August 2021 and the provisions are expected to come into effect on the 5th of August 2021 (except as otherwise specified hereafter) to enforce the measures announced in the Budget Speech 2021-2022. This highlight covers the main regulatory measures included in the Finance Act applicable to the Global Business Sector.
How the Finance (Miscellaneous Provisions) Act 2021 affect the Foundation Act
A Foundation shall authorise at least one officer or any other ordinary resident of Mauritius to produce, upon request from any competent authority, all the basic information on, including information on beneficial ownership of, the Foundation and shall notify, within 14 days, the Registrar, from the date on which an authorisation has been given or, from which there is a change concerning the authorised officer or person. This amendment is extended for limited partnerships act as well.
For a period of at least 7 years, every charitable Foundation shall keep a record containing full details of all transactions, both international and domestic, to authorise verification as to whether the funds were obtained and spent in a manner corresponding to the objects of the charitable Foundation.
The Registrar may request a charitable Foundation to submit financial statements for such period as he may judge, together with detailed breakdowns of receipts, payments and assets and liabilities, and the charitable Foundation must comply with the request in such manner as the Registrar may decide.
According to the Finance (Miscellaneous Provisions) Act 2021, a charitable Foundation must take appropriate measures to (a) confirm the identity, credentials and good standing of its beneficiaries and beneficial owners (if any), (b) confirm if its beneficial owners (if any) are not involved with or using funds of the foundation to assist terrorists or terrorist organisations and (c) confirm the identity of significant donors.
Where a Foundation, Council member, former Council member, secretary or former secretary fails to comply with its record-keeping responsibilities related to its transactions, acts or operations or any other provision of the Foundations Act, the Registrar shall inform the Foundation in writing that its name will be removed from the register of foundations if the Foundation does not amend such non-compliance within 30 days of the written notice.
The Registrar may notify a Foundation in writing that its purpose or objects no longer meet the requirements of the Foundations Act if (a) there is enough evidence that the Foundation has engaged or is about to engage in activities that are likely to create a serious threat to public safety or public order; or (b) the Foundation has directly or indirectly made, is making, or is likely to make accessible any resources to a terrorist or terrorist organisation, or for the purpose of terrorism. The Foundation may make representations within 21 days from the date of the written notice.
How the Finance (Miscellaneous Provisions) Act 2021 affect the Financial Intelligence and Anti-Money Laundering Act
A Core Group for Anti-Money Laundering and Combatting the Financing of Terrorism and Proliferation must be composed of members of the regulatory and investigatory bodies and relevant ministries to make sure that the effective implementation, by the relevant competent authorities of the Financial Action Task Force international standards on AML/CFT.
In particular, the Core Group shall make recommendations to the Prime Minister on matters, including implementation, strategy and international developments relating to AML/CFT; decide on matters relating to the implementation of AML/CFT standards which a relevant competent authority may refer to it; and ensure efficient coordination/cooperation with the National Committee and among all other competent authorities.
How the Finance (Miscellaneous Provisions) Act 2021 affect relevant Tax Measures
Non-resident trusts and foundations shall no longer be able to file a declaration of non-residence to the Mauritius Revenue Authority and subsequently benefit from any tax exemption. They will be subject to taxation of 15% with a partial exemption on applicable income. A grandfathering provision will nevertheless be applied to trusts and foundations set up before 30 June 2021 up to the year of assessment 2024-25 (does not apply to intellectual property assets/projects acquired or derived post 30 June 2021).
The 5-year tax holiday has been increased to 10 years for Family Offices, Fund and Asset Managers effective from the year of assessment commencing 1 July 2022.
Companies holding an Export Development Certificate issued by the EDB shall be eligible to be liable to tax at 3%.
Companies having an investment certificate that has been given by the EDB shall benefit an 8-year tax holiday on prescribed sectors/activities.
According to this Finance (Miscellaneous Provisions) Act 2021, manufacturing companies involved in biotechnology, medical and pharmaceutical sector will be liable to a tax of 3%, subject to meeting the conditions related to substance requirements and not claiming partial exemption. Capital expenditure incurred for the acquisition of patents will be authorised as tax credits and shall be carried forward for the 5-year period.
Double deduction would be accessible on acquisition of specialized software and systems and Research and development expenditure (R & D) targeting the African market. Qualifying R & D has been extended until June 2027.
Explanations were made in relation to the arm’s length principles to ratify that they are implemented to all entities or income earning activities performed in or from Mauritius.
How the Finance (Miscellaneous Provisions) Act 2021 affect the Economic Development Board Act
New requirements that are flexible are being enforced regarding the registration of non-citizens with the Economic Development Board (the “EDB”) for an occupation permit, family occupation permit or residence permit, or to profit from any scheme under the EDB Act. Where an application for an occupation permit necessitates the recommendation and views of a public sector agency, that public sector agency shall, within 5 working days from the date of a request from the EDB submit its views, failing which it will be considered to have no objection to the application.
A premium investor scheme is being implemented to promote – (a) emerging sectors; (b) pioneering industries and first movers; (c) innovative technologies and industries; and (d) such targeted economic activities as the Minister may approve in relation to the production of pharmaceuticals or medical devices.
How the Finance (Miscellaneous Provisions) Act 2021 affect Residence and Occupation Permits to non-citizens
New criteria for a retired non-citizen to obtain a residence permit: Minimum initial transfer of USD 1,500; and subsequently either (i) a minimum monthly transfer of USD 1,500 or (ii) transfer of an aggregate of USD 18,000 or more per year (by instalments or otherwise) during the 10-year validity of the residence permit.
Monthly salary relevant to an Occupation Permit (OP) for professionals in financial services (fund accounting and compliance services) having at least 3 years relevant work experience, by a company holding a licence from the FSC shall be Rs 30,000.
Extension of the Work Permit allowing Mauritians and non-citizen residents to bring foreign carers and maids to work in Mauritius.
Resident Permit shall be issued to a person who purchases or otherwise acquires an apartment for residential purposes, on the condition that the purchase price is USD 375,000 or more or its equivalent in any other hard convertible foreign currency.
A 10-year Family Occupation Permit is being established for an applicant contributing USD 250,000 or its equivalent in freely convertible foreign currency to the COVID19 Projects Development Fund.
The Finance (Miscellaneous Provisions) Act 2021 also makes provision for the extension of validity period of a Professional OP from 3 years to 10 years.
Spouse of OP holder willing to work in Mauritius will be exempted from applying for a separate Occupation Permit.
A complete legal supplement of the Finance (Miscellaneous Provisions) Act 2021 as assented by the President of Mauritius can be downloaded here.