Mauritius Announces New Tax Reliefs In 2021-22 Budget
Lorys Charalambous, Tax-News.com, Cyprus
06 August, 2021
Mauritius announced numerous tax relief measures for investors and for wealthy foreign individuals in its newly released Budget.
For companies, the Budget includes a concessionary rate of corporate tax of three percent, rather than 15 percent, for companies engaged in the medical, biotechnology, and pharmaceutical sector. Further, they will be allowed a full tax credit for the cost of acquiring patents.
In addition, companies constructing factories to manufacture pharmaceutical products and medical devices will benefit from exemption from:
- Registration duty and land transfer tax;
- Land conversion tax; and
- VAT on construction.
Further, Mauritius will introduce a 200 percent deduction for businesses purchasing specialized software and devices.
To support the financial services industry, the Government has announced that the tax holiday for Family Offices and for fund and asset managers will be extended from five to 10 years.
The Government has said a new Securities Bill will be introduced, new legislation governing virtual assets will be enacted, and the Bank of Mauritius will roll-out a Central Bank digital currency, the Digital Rupee, on a pilot basis.
To encourage large manufacturers to procure from SMEs, a 110 percent deduction will be allowed for purchase of products manufactured locally by SMEs.
Last, the Budget extends the Tax Arrears Settlement Scheme for SMEs up to December 2021.
For individuals, the Budget announces a new "Premium Visa Scheme". The Government says the initiative is intended to encourage eligible foreigners to stay temporarily, for at least one year, in Mauritius, with the possibility of renewal.
A holder of a Premium Visa, spending 183 days or more in the Republic of Mauritius, will be subject to income tax as follows:
- the Mauritian-sourced income of a Premium Visa Holder (e.g. emoluments for work performed remotely in Mauritius) will be taxed on a remittance basis, that is in the same manner as foreign-sourced income;
- money spent in Mauritius through the use of foreign credit or debit cards by the holder of a Premium Visa will not be deemed to have been remitted to Mauritius; and
- income brought and deposited in a bank account in Mauritius will be liable to tax except if a declaration is made by the holder of a Premium Visa that the required tax has been paid thereon in his country of origin or residence.
The scheme will be introduced retroactively, with effect from November 1, 2020.
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