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Mauritius - Indirect Tax Guide

Mauritius - Indirect Tax Guide

Explore the requirements and rules that apply to indirect taxes in Mauritius.

Explore the requirements and rules that apply to indirect taxes in Mauritius.

Seven colour sand in Mauritius

General

Types of indirect taxes (VAT/GST)

VAT.

What is standard VAT/GST rate?

15 percent.

Are there any reduced rates, zero rates or exemptions?

Zero-rated supplies include:

  • goods exported from Mauritius under customs control
  • certain food items
  • certain pharmaceutical products
  • the supply of services to a person who belongs to a country other than Mauritius and who is outside of Mauritius at the time the services are performed
  • electricity and water
  • CCTV camera systems, including CCTV digital video recorders.

Exempt supplies include:

  • basic foodstuffs (bread, wheat, breakfast cereals)
  • educational and financial services
  • the arrangement, provision, or transfer of ownership, of any contract of insurance or re-insurance under the Insurance Act
  • medical, hospital and dental services including clinical laboratory services, services provided in a health institution, veterinary services and a residential care home registered with the Ministry responsible for the subject of social security
  • the transport of passengers by public service vehicles excluding contract buses for the transport of tourists and contract cars.

What are the general and specific place of supply rules, if applicable?

Mauritius does not have specific rules that determine where a supply takes place, but the supply of goods or services should be made/utilized in Mauritius.

VAT/GST registration

Who is required to register for VAT/GST?

A person is bound to compulsory registration in any of the following circumstances:

  1. If in the course or furtherance of their business they make taxable supplies and the turnover of the taxable supplies exceeds, or is likely to exceed, 6 million Mauritian Rupees (MUR).
  2. Their turnover does not exceed the specified limit, but they are engaged in any of the businesses and professions mentioned below:
    1. Accountant and/or auditor
    2. Advertising agent
    3. Adviser including investment adviser and tax adviser
    4. Architect
    5. Attorney and/or solicitor
    6. Barrister having more than 2 years standing at the Bar
    7. Clearing and forwarding agent under the Customs Act
    8. Consultant including legal consultant, tax consultant, management consultant and management company other than a holder of a management license under the Financial Services Development Act 2001
    9. Customs house broker under Customs Act
    10. Engineer
    11. Estate agent
    12. Land surveyor
    13. Marine surveyor
    14. Motor surveyor
    15. Notary
    16. Optician
    17. Project manager
    18. Property valuer
    19. Quantity surveyor
    20. Sworn auctioneer
    21. General sales agent of airlines
    22. Agents in the importation of second-hand motor cars or other motor vehicles.
  3. They are engaged in any of the businesses specified below, irrespective of the turnover of their taxable supplies:
    1. Banking by a company holding a Banking Licence under the Banking Act with respect to its banking transactions other than with non-residents and corporations holding a Global Business Licence under the FSD Act 2001.
    2. Management services by a holder of a management licence under the Financial Services Development Act 2001 with respect to services supplied other than those supplied to corporations holding a Category 1 Global Business Licence or a Category 2 Global Business Licence under the Act.
    3. Services related to credit cards issued by companies other than banks to merchants accepting such credit cards as payment for the supply of goods.

Is voluntary VAT/GST registration possible for an overseas company?

Yes, provided that the overseas company makes taxable supply in Mauritius i.e. the supply of goods is in Mauritius or the supply of services is performed or utilized in Mauritius.

Does an overseas company need to appoint a fiscal representative?

No, however, the company should be able to meet all its obligations with the local tax authority.

Is VAT/GST grouping* possible?

No.

VAT/GST compliance

How frequently are VAT/GST and other indirect tax returns submitted?

  • monthly if annual turnover of taxable supplies exceeds MUR10 million
  • quarterly returns if annual turnover is below MUR10 million.

Can returns be filed and payments be made electronically?

Yes.

What are the exchange rate rules?

The VAT Return must be submitted in MUR.

In the event the supplier issues an invoice in any foreign currencies other than MUR, the supplier should display the exchange rate used at the date of the invoice.

VAT/GST recovery

Can an overseas company recover VAT/GST and other indirect taxes if not registered for VAT/GST locally?

No.

Is it a prerequisite that output tax be charged before input tax can be claimed?

Output tax should be remitted at the time the invoice is issued by the supplier or payment is made for that supply, whichever occurs first.

On the other hand, credit for input tax suffered may be claimed up to 36 months from the date of the invoice.

Both output tax and input tax are reported in the VAT Return and are offset against each other, resulting in either a VAT payable or Excess input VAT.

Are there any exemptions with the right to recover or deduct input VAT?

Credit for input tax suffered can be claimed with respect to goods or services which are used to make taxable supplies only, and not exempt supplies or supplies for own consumption.

For what period of time may input tax not previously claimed be claimed (i.e. prescription)?

36 months from the date the input tax ought to have been taken.

Where a VAT return reflects a refund due to the taxpayer, is the refund paid to the taxpayer or is the taxpayer required to utilize the refund as a credit against future payments?

VAT refunds are carried forward and offset against future payment of any VAT.

A VAT registered person is eligible for repayment if:

  • they are engaged in making zero-rated supplies; or 
  • the excess amount shown in their return includes allowable input tax amounting to more than MUR100,000 with respect to capital goods being building or structure, plant, machinery or equipment of a capital nature; or
  • they proves that it is unlikely that the refund will be offset against output tax in subsequent VAT returns.

Invoices

Is a business required to issue tax invoices?

Yes.

Is it possible/mandatory to issue invoices electronically?

Yes, invoices can be issued electronically.

Is it possible to issue recipient-created tax invoices?

No.

Audits

Do tax audits take place on a regular basis?

Yes.

Tax audits are made with respect to a period before 4 years immediately preceding the last day of the taxable period in which the liability to pay tax arose.

Are audits done electronically in your country/territory (e-audit)? If so, what system is in use?

Yes, the local tax authority uses their own designed system/software.

What penalties can arise from non-compliance?

The following penalties are levied:

  • MUR2,000 per month or part of the month for late submission of VAT return (limited to MUR20,000)
  • 10 percent fixed penalty for late payment of tax
  • 1 percent interest per month or part of the month on the unpaid tax from the date the tax remained unpaid to the date of payment.

Special indirect tax rules

Are there unique country/territory-specific indirect tax rules that differ from 'standard' indirect tax rules in other jurisdictions?

No.

Does a reverse charge mechanism apply?

Yes, only applicable to services where a non-resident makes a taxable supply in Mauritius of services (performed or utilized in Mauritius) to a VAT Registered Person.

The recipient of the services must account for VAT as if the services had been supplied in Mauritius and the supply was a taxable supply.

Can VAT on reverse charge be claimed as input tax, to the extent that the expense on which the reverse charge VAT is accounted for, is used for taxable purposes?

Yes, the VAT is declared as both output and input VAT to neutralize the effect of the transaction.

Can non-residents appoint local agents in order to avoid reverse charge VAT by virtue of charging standard rate VAT and accounting for such VAT through the agent?

Yes, as long as all the VAT obligations are met in Mauritius.

Are there indirect tax incentives available (e.g. reduced tax, tax holidays)?

No.

Rulings

Is it possible to apply for formal or informal advance rulings from the tax authority?

Yes.

Are rulings and decisions issued by the tax authorities publically available?

Yes, they are available on the Mauritius Revenue Authority’s website.

Other Indirect taxes

Are there other indirect taxes not commented on above?

Yes, other indirect taxes include:

  • customs duties
  • excise duties
  • taxes on gambling and transportation— registration duty
  • stamp duty
  • land transfer tax.

For further information please contact

Wasoudeo Balloo
Partner
KPMG in Mauritius
T: +230 406 9891
E: wballoo@kpmg.mu

Footnote

*By ‘grouping’ we mean: either a consolidation mechanism between taxpayers belonging to the same group (payment and refund are compensated but taxpayers remain distinct) or a fiscal unity for VAT/GST purposes (several taxpayers are regarded as a single taxpayer).

Disclaimer

All information contained in this document is summarized by KPMG in Mauritius, a member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

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