being taxed. If a service is taxed in the jurisdiction under the “use and enjoyment” provisions, a non-established supplier of the service may be required to register for VAT in every jurisdiction where it has customers that are not taxable persons. In Mauritius, no services are subject to the “use and enjoyment” provisions.
Transfer of a going concern. Normally, the sale of the assets of a VAT-registered or VAT-registrable business will be subject to VAT at the appropriate rate. However, a transfer of a business as a going concern (TOGC) may be outside the scope of the tax under certain conditions. A TOGC is the sale of a business or part of a business capable of separate operation, including assets. Where the sale meets the conditions, the supply is treated as outside the scope of VAT. In Mauritius, a TOGC is treated as outside the scope of VAT where there is a sale or transfer of a whole business as a going concern. Note that a proportion of the input tax incurred on any building or part of any building treated as allowable over the last 20 years is treated as a deemed output tax by the VAT registered person.
Transactions between related parties. In Mauritius, for a transaction between related parties, the value for VAT purposes is calculated at an arm’s length. Furthermore, the MRA has the power to direct the taxable value of any supply for any transaction. In practice, such a power is applied in the context of abusive transactions.
C. Who is liable
A taxable person is any entity or person that is required to be registered for VAT.
VAT registration is compulsory if annual turnover from a trade or profession exceeds MUR6 million.
However, persons engaged in certain businesses or professions must register for VAT, regardless of their level of turnover. This rule applies to the following businesses or professions:
• Accountants
• Agents in the importation of secondhand motor vehicles
• Auditors
• Advertising agents
• Advisors
• Architects
• Attorneys
• Barristers with more than two years’ standing at the Bar
• Clearing and forwarding agents
• Customs house brokers
• Engineers
• Estate agents
• Land surveyors
• Notaries
• Opticians
• Project managers
• Property valuers
• Quantity surveyors
• Sworn auctioneers
• Tour operators
• General sales agents of airlines
Exemption from registration. A taxable person whose turnover is exclusively zero-rated may choose not to apply for registration. A taxable person whose turnover is exclusively exempt from VAT may not apply for registration.
• Transport of passengers by public services vehicles
• Medical, hospital and dental services
• Nursing care and residential care services
• Vegetable seeds, fruit and flower seeds, bulbs and plants used for sowing and planting
The term “exempt supplies” refers to supplies of goods and services that are not liable to VAT and that do not give rise to a right of input tax deduction.
Examples of exempt supplies of goods and services
• Baby food
• Breakfast cereals
• Entrance to cinemas, concerts, shows and digital art galleries
• Films, including royalties
• Educational services
• Certain financial services
• Insurance
• Land
• Training services approved by the Mauritius Qualifications Authority
Option to tax for exempt supplies. The option to tax exempt supplies is not available in Mauritius.
E. Time of supply
The time when VAT becomes due is called the “time of supply” or “tax point.” The tax point under the Mauritian law is the earlier of the receipt of payment or the issuance of an invoice or VAT invoice.
Deposits and prepayments. The receipt of a deposit or prepayment normally creates an actual tax point if the amount is paid in the expectation that it will form part of the total payment for a particular supply. A tax point is created only to the extent of the payment received.
Continuous supplies of services. If services are supplied continuously, a tax point is created each time a payment is made or an invoice or VAT invoice is issued, whichever occurs earlier.
Goods sent on approval for sale or return. The tax point for goods sent on approval or for sale or return is the earlier of the issuance of an invoice or VAT invoice or when payment is received.
Reverse-charge services. The tax point for reverse-charge services is when the consideration for the services is paid. If the consideration for the services is not in money, the tax point is the last day of the VAT period during which the services are performed.
Leased assets. The time of supply for the supply of leased assets is the earlier of the issue of an invoice or receipt of payment. For hire-purchase agreements, the tax point arises when the agreement is made.
Imported goods. The time of supply for imported goods is the time when the goods are removed from customs.
F. Recovery of VAT by taxable persons
A taxable person may recover input tax, which is VAT charged on goods and services supplied to it for business purposes. A taxable person generally recovers input tax by deducting it from output tax, which is VAT charged on supplies made.
The time limit for a taxable person to claim input tax not reported in the correct taxable period in Mauritius is three years.
2024. This will also apply to nontaxable persons. However, the regulations on the scope of this measure have not been prescribed, though it will first apply to businesses with an annual turnover of at least MUR100 million.
In June 2023, the MRA issued the functional specifications of the Electronic Billing System (EBS). The standard electronic invoicing template, debit notes and credit notes were the subject matter of the guidance issued by the MRA in June 2023. The legal mechanism of the electronic invoicing system is provided in the Value-Added Tax (E-invoicing) Regulations 2023, effective as from 2 October 2023 and specifically addressed the following:
• The electronic invoicing system
• The features of the EBS, together with its registration and non-registration
• The invoice fiscalization platform
• Transaction data
• EBS solution providers
• The particulars of the fiscal invoices
Simplified VAT invoices. Simplified VAT invoicing is not allowed in Mauritius. Simplified invoicing rules do, however, apply for supplies made by non-VAT registered persons (where no VAT is charged), and a receipt can be issued.
Self-billing. Self-billing is not allowed in Mauritius.
Proof of exports. In connection with the export of goods, documentary evidence regarding customs control should be kept. Such documents include the export bill, bill of lading and invoices issued to the foreign party
Foreign currency invoices. If an invoice or a VAT invoice is issued in a foreign currency, the VAT due must be converted into the domestic currency, which is the Mauritian rupee (MUR), using the prevailing exchange rate at the time of the issuance of the invoice.
Supplies to nontaxable persons. Full VAT invoices must be issued to any person, such that the same invoicing requirements apply for supplies to taxable and nontaxable persons.
Records. Every taxable person is required by the VAT law to keep in the course or furtherance of their business a full and true written record in English or French language of every transaction made.
In Mauritius, examples of what records that must be held for VAT purposes include basic accounting records. There is no precise guidance in the regulations for what records must be kept, and in practice, the MRA is flexible and considers basic accounting records.
In Mauritius, VAT books and records can be held outside of the country. Though there is nothing in the VAT law on the place of the records, the corporate laws require the approval of the Registrar of Companies if the accounting records are kept outside of Mauritius.
Record retention period. A taxable person is not allowed to furnish any information and/or produce any books and records after five years immediately following the last day of the taxable period in which the transaction occurs. The time limit of five years does not apply in the case of willful neglect, evasion or fraud.
Electronic archiving. Electronic archiving is allowed in Mauritius. Records may be kept electronically in Mauritius, but it is not mandatory, and therefore physical records (i.e., paper) can also be used. The manner the electronic records should be kept is not specified in the law.
I. Returns and payment
Periodic returns. VAT returns are submitted either quarterly or monthly. The quarterly return periods end in March, June, September and December. Returns must be submitted within 20 days