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Highlights on the key amendments made to the Mauritius Finance (Miscellaneous Provisions) Act 2022

Insight 12 August 2022

Highlights on the key amendments made to the Mauritius Finance (Miscellaneous Provisions) Act 2022

The Finance (Miscellaneous Provisions) Act was officially gazetted on 2 August 2022 and the provisions are deemed to come into operation on 2 August 2022.

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 relevant to the Global Business Sector.

  • Temporary time extensions: 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 meeting 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 may be determined by the ROC.

  • Small private companies: 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.
  • Companies required to prepare group financial statements shall disclose the following information with respect to subsidiaries in their annual reports – (i) particulars of interest; (ii) donations made by the subsidiaries; (iii) details of present and past directors; (iv) fees payable to auditors; and (v) details of major transactions. This requirement does not apply to holders of Global Business licences and Authorised Companies, as exempted under the Act.
  • Companies redomiciling their place of incorporation in or from Mauritius will be required to provide the Registrar of Companies with a certificate of deregistration or a certificate of registration by continuation from the foreign jurisdiction before registering or removing the company from its register to avoid a company being registered in two jurisdictions at the same time.
  • In addition to the existing grounds on which ROC can remove a company from the register of companies, it can now also remove a company where there is no other reason for the company to continue its existence.

  • 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.
  • 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.
  • 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.
  • 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.

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.
  • 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.
  • The Income Tax Act 1995 (“ITA”) has been amended to introduce a Qualified Domestic Top-up Tax applicable to companies forming part of multinationals with a global revenue of EUR750 million.

    Whilst ‘Qualified Domestic Minimum Top-up Tax” has the same meaning as per the GloBE Rules, as approved by the Inclusive Framework on BEPS, we expect further details on the amendment in the legislation in due course.
  • Gross income attributable to work performed by a foreign employer having an employee working remotely from Mauritius shall be deemed to be derived by the employer in Mauritius. Such amendment shall not be applicable to employees working in Mauritius and holding a premium visa and in the case where the core business activities of the employer are outside of Mauritius.

  • Tax Incentives- Eight-year holiday would be granted to:
    • Innovative agricultural methods under the Integrated Modern Agricultural Morcellement Scheme administered and managed by the Economic Development Board (“EDB”)
    • Person engaged in sustainable agricultural practices and registered with the EDB
    • Companies issued with a certificate as a freeport operator or private freeport developer under the Freeport Act, having started its operations on or after 1 July 2022 with a minimum investment of MUR50 million, subject to compliance with conditions relating to substance requirements 

  • An angel investor having invested a minimum of MUR100,000 in shares to the seed capital of a qualifying start-up SME, shall be able to deduct from his net income, 50 per cent of the amount invested in an income year. The maximum amount which is allowed as a deduction is capped at MUR500,000 in an income year and the angel investor along with his relatives should not hold more than 25 per cent of the share capital of the start-up SME.

  • Tax Deduction at Source (“TDS”) rates have been extended and reviewed as follows:
    • 3 per cent has been introduced to:
      • payments made to consultants
      • providers of security and cleaning services and pest management services
      • insurance companies to motor surveyors and mechanics for repairs of motor vehicles of policy holders
    • TDS rates have been increased from:
      • 5 per cent to 7.5 per cent in respect of rent
      • 3 per cent to 5 per cent in respect of payments made to service providers as per the Fifth schedule to the ITA and including accountant/accounting firms, solicitor/attorney or legal consultant.

  • The ITA has been amended to allow Mauritius to enter into international arrangements (i) for the purpose of alternative dispute resolution with a view to resolve cross-border tax disputed or (ii) to implement internationally agreed standards to prevent base erosion and profit shifting.

  • The Tax Alternative Settlement Scheme has been re-introduced to allow waiver of penalties and interests in respect of tax arrears outstanding as at 7 June 2022 under the ITA, the VAT Act and Gambling Regulatory Authority Act, provided such arrears are settled by 31 March 2023 and taxpayers make an application with the MRA by 31 December 2022.

 

  • The ITA has been amended to empower the MRA to request for information from a Foundation or Trust for the purpose of:
    • Making an assessment;
    • Collecting tax; or
    • Complying with request for the exchange of information under a Double Taxation Avoidance Agreement.

If you would like more information, reach out to Bimal directly.

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This highlight is for information purposes only. While every care has been taken to make it as comprehensible as possible, it may have omitted information that is useful to a particular reader. You are urged to seek professional advice as may be required and not rely on this highlight as advice or opinion.

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