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Changes Brought By The Finance (Miscellaneous Provisions) Act 2019, Mauritius

Insight 28 August 2019

Changes Brought By The Finance (Miscellaneous Provisions) Act 2019, Mauritius

Further to the 2019-2020 Mauritius Budget Speech which was read at the National Assembly, the Finance (Miscellaneous Provisions) Act 2019 (the “FA”) was approved early in July 2019.

Further to the 2019-2020 Mauritius Budget Speech which was read at the National Assembly, the Finance (Miscellaneous Provisions) Act 2019 (the “FA”) was approved early in July 2019. We set below the amendments brought by the FA and the implications for the global business sector.


The Companies Act 2001 (the “CA”)
1. Number of shareholders for Private Companies

The maximum number of shareholders that a private company can have has been increased from 25 to 50.

SANNE Comments: The extension of the maximum number of shareholders for a private company is a welcome initiative. Companies having up to 50 shareholders may now be structured as a private company. Being a private company understandably affords more flexibility to companies with regards to certain aspects of their operations.

2. Information on beneficial owner

A new definition of “beneficial owner” and “ultimate beneficial owner” has been introduced as follows:

a) any natural person who ultimately owns or controls a company or the natural person on whose behalf a transaction or activity is being conducted in relation to a company.

b) Including:

i) The natural person who ultimately owns or controls a company through-

  • Direct or indirect ownership of such shares in such percentage as may be prescribed;
  • Voting rights;
  • Ownership interest; or
  • Control by other means;

ii) Where no natural person under paragraph (i) is identified, or if there is any doubt that the person identified is the beneficial owner, the natural person who controls the company in the manner one company controls another company;

iii) Where no person under paragraphs (i) and (ii) is identified, the natural person who acts as executive director or has equivalent executive powers.

All companies will have to keep an updated records of the information on the Beneficial Owner (BO) or Ultimate Beneficial Owner (UBO) (names and addresses) and actions taken to identify a BO or UBO in accordance with the above new definition. The information will also have to be conveyed to the Registrar of Companies (ROC) within 14 days from the date on which any entry or alteration is made in the share register.

SANNE Comments: We are in discussion with the authorities as to whether the information should be disclosed to the ROC only in case there is a nominee shareholder arrangement or in all circumstances.

3. Board Diversity

All public companies shall have a minimum of one woman on the Board of Directors.
SANNE Comments: This amendment follows the requirement in the latest Code of Corporate Governance to maintain board diversity.

​The Financial Services Act 2007 (the “FSA”)

1. Definition

The definition of ‘officer’ has been amended to include ‘money laundering reporting officer, a deputy money laundering reporting officer and a compliance officer[1]’.
SANNE Comments: Appointment of the aforementioned persons would now require the prior approval of the FSC.

[1] A compliance officer ensures that a company complies with its regulatory and legal requirements.

2. Investigations

In relation to investigations being conducted by the FSC, all licencees must henceforth provide access to any program or data and access to any file, document or record held electronically in any computer or other electronic device to investigators from the FSC.

3. Whistleblowing

The FSA has been amended to provide more protection to any person who makes a report or disclosure in good faith to the FSC that is required or permitted under the law of Mauritius or that relates to a matter in respect of which the FSC has functions under the laws of Mauritius.

4. Financial services

The following have been added to the list of financial business activities in schedule 2 of the FSA:

  • Crowdfunding
  • Fintech Service Providers
  • Robotic and Artificial Intelligence Enabled Advisory Services.

5. Central Management and Control of Authorised Companies

All Authorised Companies must have its central management and control outside of Mauritius.

SANNE Comments: The Mauritius Revenue Authority (the “MRA”) issued a circular in 2018 whereby stating that all Authorised Companies must have their Place of Effective Management (POEM) outside of Mauritius. The latter criteria has been superseded by the requirement that control and management should be outside of Mauritius. Our view is that same is to be assessed as per the guidelines set-out under the FSA - the circular relating to POEM issued by the MRA in 2018 is no longer applicable.

6. Single Window System

A facility known as Single Window System shall be administered by the FSC. The System shall act as centre and channel for the expeditious submission of any relevant permits.

The Securities Act 2005

  1. Definition

The definition of “securities” has been expressly widened to include “green bonds”.

The Limited Liability Partnerships Act 2016 and the Limited Partnerships 2011

  1. Definition for Beneficial Owner and Ultimate Beneficial Owner

The definition for BO and UBO under these acts will be the same as under the Companies Act.

The Income Tax Act 1995

  1. Personal Taxation:

The new income exemption threshold applicable to resident individuals is as per below table:



Category A (no depndent)

310, 000 (previously 305, 000)

Category B (1 dependent)

420, 000 (previously 415, 000)

Category C (2 dependents)

500, 000 (previously 485, 000)

Category D (3 dependents)

550, 000 (previously 525, 000)

Category E (4 or more dependents)

600, 000 (previously 555, 000)

  • In addition to deducting the relevant income exemption threshold, a retired person or a disabled person may be allowed to deduct an additional amount of MUR50,000 from their net income.
  • Tax credit for employees:
  • An employee would be entitled to a tax credit of 5% of his chargeable income in an income year provided:
    1. His/ her basic salary inclusive of compensation does not exceed MUR 50, 000 in the first month of an income year; and
    2. His/ her total annual net income does not exceed MUR 700, 000 in that income year.

The tax credit would not be applicable to individuals with net income less than MUR 650, 000 in an income year since they are already taxed at a reduced rate of 10%.

  • Relief for medical or health insurance premium for a fourth dependent (previously same was limited to three dependents) would be available.
  • The first MUR 50, 000 of the amount receivable by an individual in an income year from a REIT would be exempted from taxation.

2. Corporate Taxation:

  • Real Estate Investment Trust (REIT):

The FSC may authorise a collective investment scheme or a closed-end fund to operate as a REIT. A REIT would not be liable to income tax provided certain conditions are satisfied. It would also be exempted from the requirement to set up a CSR Fund. The beneficiaries or participants to a REIT would be liable to income tax on their share of distributions received from the REIT.

  • Freeport operator or private Freeport developer engaged in the manufacturing of goods for the local market would avail of an income tax rate of 3%, provided the conditions relating to the substance of its activities are met. It should be noted that should the Freeport operator or private Freeport developer be engaged in the sale of goods on local market, a CSR Fund would be required to be set up proportionate to the income derived locally.
  • Accumulated unrelieved losses:

A company may carry forward accumulated unrelieved losses, irrespective of a change exceeding 50% in its shareholding and subject to satisfying the conditions that the Minister may impose to safeguard employment are complied with, where:

  1. Such a company is a manufacturing company.
  2. The company has been facing financial difficulty.
  • Allowable expenditure in respect of arbitration, conciliation or mediation:

A company which incurred expenditure in respect of filing a request for arbitration, conciliation or mediation for settlement of a dispute in Mauritius would be allowed to deduct 150% of such expenditure from its gross income.

  • Controlled foreign company (CFC) rule:

A CFC is a company which is not resident in Mauritius and in which, more than 50% of its total participation rights are held directly or indirectly by a resident company, or jointly with its associated enterprises. A CFC may also include a permanent establishment of the resident company.

Where a resident company carries on business through a CFC and it is considered that the non-distributed income of such CFC arises from arrangements put in place solely to obtain a tax benefit, such income would be deemed to form part of the chargeable income of the resident company.

The CFC rule will not apply to a CFC where in an income year:

  1. Its accounting profits do not exceed EUR 750 ,000 and non-trading income do not exceed EUR 75, 000.
  2. Its accounting profits amount to less than 10% of its operating costs for the tax period.
  3. The tax rate in the country of residence of the CFC exceeds 50% of the tax rate in Mauritius.
  • Presumptive Tax on Small Enterprise

A small enterprise may, by irrevocable notice, elect to pay a presumptive tax at the rate of 1% of its gross income if it carries out activities in the agriculture, forestry and fishing, manufacturing (excluding restaurant business), wholesale and retail of goods (‘the specified activities’).

Such irrevocable election may only be done by entities if their gross income does not exceed MUR 10 million (approximately USD 285, 000) from the specified activates and MUR 400, 000 (approximately USD 11, 430) from other sources. Where such election has been made, the small enterprise is not entitled to claim any deduction, income exemption threshold, relief or allowance.

  • Powers of Judge in Chambers in respect to exchange of information

The Director-General of the MRA may apply to the Judge in Chambers for an order requiring a person to comply with a request for the exchange of information from a foreign country. The order will be issued provided that the person had initially failed to provide requested information within the time fixed by the MRA and where such an order would be necessary for the MRA to comply with the request for exchange of information.

  • Voluntary Disclosure of Income Scheme – Foreign Assets

A person making a voluntary disclosure of his undeclared income in respect of any Year of Assessment (YOA) preceding the YOA ending on 30 June 2010, would be required to pay tax on such income at the rate of 15%, free of any penalty and interest. Such voluntary disclosure should be made on or before 31 March 2020. Any unpaid tax post 31 March 2020 would carry interest at a rate of 0.5% per month.

The Scheme is applicable only to undisclosed income derived in Mauritius but held offshore in bank accounts or used to purchase assets offshore.

  • Income derived by a company from intellectual property assets developed in Mauritius on or after 10 June 2019 would be exempt from taxation for a period of 8 income years.
  • Subject to meeting prescribed substance conditions, 80% of income derived by a company from the activities listed below would be exempt from taxation:
  1. Reinsurance and reinsurance brokering.
  2. Leasing and provision of international fibre capacity.
  3. Sale, financing arrangement, asset management of aircraft and its spare parts and aviation advisory services related thereto.
  • 80% of interest derived from money lent through a peer-to-peer lending platform operated under a licence issued by the FSC under the FSA would be exempt from income tax. Interest receivable from money lent through the Peer-to-Peer Lending platform, which is proved to have become bad, may be deducted for tax purposes. Unrelieved amount of debt/interest may be carried forward for set off against interest in succeeding income years.
  • A tax holiday of 5 succeeding income year, starting in the year of start of operations and subject to meeting the conditions prescribed in relation to substance of its activities would be granted on the following income:
  • Income derived from the operation of an E-Commerce platform by a company set up on or before 30 June 2025 and issued with an E-Commerce certificate.
  • Income derived by a person from the operation of a Peer-to-Peer Lending platform, where such operations have started prior to 31 December 2020.
  • A tax holiday of eight income years, starting in the year of start of operations, is granted to companies set-up on or after 10 June 2019 and which derive income from the development of a marina.

The Value Added Tax Act 1998

  • All VAT returns should now be submitted electronically.
  • Special Levy on Banks

The definition of “resident” has been amended to:

  1. include a company incorporated outside Mauritius in so far as its banking transactions are carried out through a permanent establishment in Mauritius; and
  2. exclude a company incorporated in Mauritius in so far as its banking transactions are carried out through a permanent establishment outside Mauritius.

The special levy payable by banks having leviable income of more than MUR1.2 billion has been amended from 4% to 4.5%.

For banks in operation as at 30 June 2018, the levy payable would be the lower of:

  1. 1.5 times of the levy payable for the YOA 2017-2018; and
  2. 4% or 5.5% of their leviable income derived in the accounting period (depending on the leviable income derived in that YOA).
  • Tax liability of principal officer of private company.

The principal officer of a private company would be accountable for all VAT obligations of the company, including but not restricted to retaining money or property for payment of VAT as it falls due. The personal liability of the principal officer will be engaged where VAT has been unpaid or not retained.

A principal officer would include the executive director, or other any person who exercises or who is entitled to exercise or who controls or who is entitled to control, the exercise of powers which would fall to be exercised by the Board of directors.

Should you have any further questions please feel free to liaise with your Sanne contact.