Section 161A: Transitional provisions

161A. Transitional provisions (1) – (2) — I5 – 95 [Issue 6] Income Tax Act (2A) Notwithstanding the repeal of sections 69 and 72, the provisions of those sections shall continue to apply to any company which has subscribed, on or before 30 June 2006, to the share capital issued by a company which is listed on the Stock Exchange or an equity fund or an authorised mutual fund. (2B) (a) Notwithstanding the repeal of section 69A but subject to paragraph (b), the provisions of that section shall continue to apply to a company which has subscribed, on or before 30 June 2008, to the share capital of a company set up for the purpose of operating a spinning factory or an amount exceeding 60 million rupees or at least 20 per cent of the stated capital, whichever is the higher. (b) The provisions of the repealed section 69A shall also apply to a company that has subscribed, on or before 30 June 2008, to the stated capital of a company engaged in weaving, dyeing and knitting of fabrics for an amount exceeding 10 million rupees or at least 20 per cent of the stated capital, whichever is the higher. (2C) Notwithstanding the repeal of sections 70 and 72, the provisions of those sections shall continue to apply to a company holding an investment certificate in respect of a modernisation and expansion enterprise, issued under the Investment Promotion Act and in force as at 30 September 2006, which has incurred capital expenditure on or before 30 June 2006, of not less than 10 million rupees within 2 years from the date of the issue of the certificate, on the acquisition of new plant and equipment or technology for modernisation and expansion. (2D) — (3) – (6) — (6A) — Exempt Income (7) — (7A) Notwithstanding the repeal of item 33 of Part I of the Second Schedule, the income of a company set up for the purpose of operating a spinning, weaving, dyeing or knitting of fabrics factory and— (a) having started operations before 30 June 2006, shall be exempt from income tax for a period of 10 income years as from the income year it started operations; or (b) starting operation during the period from 1 July 2006 to 30 June 2008, shall be exempt from income tax for all income years up to and including income year ending 30 June 2016. (7B) Notwithstanding the repeal of item 22 of Part IV of the Second Schedule, the exemption provided under that item shall continue to be granted to a company holding an investment certificate issued under the Investment Promotion (Regional Headquarters Scheme) Regulations 2001 and in force as at 30 September 2006. [Issue 6] I5 – 96 Revised Laws of Mauritius (7C) Notwithstanding the repeal of item 29 of Part I of the Second Schedule, the exemption provided under that item shall continue to be granted to a company holding an investment certificate issued under the Investment Promotion (ICT Scheme) Regulations 2002 and in force as at 30 September 2006, subject to the following paragraphs— (a) where during the period of exemption referred to in paragraph (a) of the repealed item, a company provides services to residents, the net income derived therefrom shall be subject to income tax at the rate specified in the First Schedule; (b) where on or after 1 July 2008, a company holding an investment certificate issued on or before 30 June 2005 does not satisfy the requirements of regulation 5 of the Investment Promotion (ICT Scheme) Regulations 2002, the net income of the company shall, notwithstanding paragraph (a) of the repealed item, be s aragraph (a) of the repealed item, a company provides services to residents, the net income derived therefrom shall be subject to income tax at the rate specified in the First Schedule; (b) where on or after 1 July 2008, a company holding an investment certificate issued on or before 30 June 2005 does not satisfy the requirements of regulation 5 of the Investment Promotion (ICT Scheme) Regulations 2002, the net income of the company shall, notwithstanding paragraph (a) of the repealed item, be subject to income tax at the rate specified in the First Schedule; (c) a company holding an investment certificate issued prior to 30 September 2006 in respect of business process outsourcing/ back office operations, call centres or contact centres may, within 60 days of the date of the investment certificate, by irrevocable notice in writing to the Director-General, elect to have two-thirds of its net income exempted; (d) where a company has made an election in accordance with paragraph (c), two-thirds of its net income shall be exempted from income tax up to the income year ending 30 June 2012; (e) paragraph (a) shall not apply to the net income derived up to 30 June 2008 by a company holding an investment certificate issued on or before 30 June 2005. (7D) Notwithstanding the other provisions of this Act, any loss incurred by a company referred to in subsections (7A), (7B) and (7C) during the period of exemption of its net income shall be available for carry forward under section 59. (7E) Notwithstanding this Act, any payment made after 30 June 2006, by way of severance allowance, retiring allowance or commutation of pension, to a person entitled to such payment on or before 30 June 2006 shall be exempt as provided under item 4, 5, or 6 of Part II of the repealed Second Schedule. (8) – (9) — Investment Allowance (10) Notwithstanding the repeal of section 64A, that section shall continue to apply to— (a) a manufacturing company that has incurred capital expenditure on the acquisition of state-of-the-art technological equipment; or I5 – 97 [Issue 6] Income Tax Act (b) an ICT company that incurs up to 30 June 2008 capital expenditure on the acquisition of new plant and machinery or computer software. (11) — 50% Personal Income Tax Exemption on Emoluments of an Expatriate or Specified Mauritian Citizen (12) — Companies Operating in Freeport Zone (13) Notwithstanding the repeal of section 49— (a) – (b) — (c) where a private freeport developer referred to in paragraph (b) is licensed prior to 1 June 2002 and is authorised to provide goods and services to a person outside the freeport zone— (i) it shall be liable to income tax on its chargeable income computed by reference to its income derived from the provision of those goods and services at the rate specified in the First Schedule; but (ii) it shall be exempt from income tax payable for all income years up to and including income year ending 31 December 2013 in respect of income other than its income referred to in subparagraph (i) and thereafter be subject to tax at the rate specified in the First Schedule; (d) – (f) — (g) the chargeable income under paragraphs (b) and (c) shall be computed in the manner prescribed under regulation 16 of the Income Tax Regulations 1996; (h) in this subsection— “private freeport developer” means a company licensed as such under the Freeport Act; (i) any income derived by a private freeport developer or freeport operator from paper trading activities shall be exempt to in subparagraph (i) and thereafter be subject to tax at the rate specified in the First Schedule; (d) – (f) — (g) the chargeable income under paragraphs (b) and (c) shall be computed in the manner prescribed under regulation 16 of the Income Tax Regulations 1996; (h) in this subsection— “private freeport developer” means a company licensed as such under the Freeport Act; (i) any income derived by a private freeport developer or freeport operator from paper trading activities shall be exempt from income tax payable for all income years commencing of 1 July 2003 and ending on 31 December 2013. continued on page I5 – 99 [Issue 6] I5 – 98 Revised Laws of Mauritius Annual and Investment Allowance (14) Notwithstanding section 63 and the repeal of section 64 but subject to the other provisions of this subsection— (a) a company whose application has been approved under the Investment Promotion Act, or whose proposed activity has been approved under any other enactment may opt by irrevocable notice in writing to the Director-General to claim annual allowance in respect of capital expenditure incurred on or before 30 June 2009 at the rates prevailing on 30 June 2006; (b) where a company referred to in paragraph (a) has opted to claim annual allowance at the rates prevailing on 30 June 2006, it shall also be allowed to claim investment allowances in respect of capital expenditure incurred on or before 30 June 2009, on— (i) the construction of industrial premises; (ii) the acquisition of new plant and machinery; or (iii) the acquisition of computer software; and the company shall be allowed a deduction of 25 per cent of the capital expenditure so incurred by way of investment allowance in respect of the income year in which the expenditure is incurred; (c) no deduction shall be allowed under paragraph (b) in respect of expenditure incurred in the acquisition of a road vehicle, other than a new bus of a seating capacity of not less than 30; (d) subject to paragraph (e), where capital expenditure has been incurred on— (i) the construction of industrial premises; or (ii) the acquisition of new plant and machinery for the processing of agricultural, fisheries or livestock products, or for manufacture, in the Island of Rodrigues, the company shall be allowed a deduction of the capital expenditure so incurred by way of investment allowance in respect of the income year in which the expenditure is incurred; (e) no deduction shall be allowed under paragraph (b) where the person is allowed a deduction under paragraph (d); (f) no investment allowance shall be allowed under this subsection— (i) unless— (A) the expenditure is incurred exclusively in the production of gross income in the income year in which the expenditure is incurred; and (B) section 153 (1) are complied with; (ii) in respect of expenditure incurred in the acquisition of machinery or plant which is used or second-hand machinery or plant at the date of its acquisition; or I5 – 99 [Issue 7] Income Tax Act (iii) where before the expiry of 5 years from the date on which the expenditure was incurred— (A) the industrial premises are sold, demolished or destroyed, or ceased to be used exclusively as industrial premises; (B) the plant or machinery is sold, scrapped or ceases to be used for the purpose of the trade carried on by the person; or (C) the trade carried on by the person is permanently discontinued; (g) subject to paragraph (h), where a deduction has been allowed under this subsection a x Act (iii) where before the expiry of 5 years from the date on which the expenditure was incurred— (A) the industrial premises are sold, demolished or destroyed, or ceased to be used exclusively as industrial premises; (B) the plant or machinery is sold, scrapped or ceases to be used for the purpose of the trade carried on by the person; or (C) the trade carried on by the person is permanently discontinued; (g) subject to paragraph (h), where a deduction has been allowed under this subsection and any of the events specified in paragraph (f) (iii) occurs, the deduction allowed shall be withdrawn and the amount of the deduction so withdrawn shall be deemed to be the gross income of the person in the income year in which the event occurs; (h) paragraph (g) shall not apply— (i) where a person sells or otherwise transfers plant or machinery to a relative or to a related company and the plant or machinery sold or transferred is used by the relative or the related company for the production of gross income; (ii) where a person sells or otherwise transfers industrial premises to a relative or to a related company and the premises sold or transferred are used by the relative or the related company as industrial premises; (iii) in respect of industrial premises or plant or machinery sold or otherwise transferred by a person or body of persons engaged in a specified activity to a company engaged in a specified activity provided that the company or its holding company, as the case may be, satisfies the conditions specified in section 12 of the Sugar Industry Efficiency Act. (14A) Notwithstanding section 24 and regulation 7 and the Second Schedule to the Income Tax Regulations 1996, accelerated annual allowance shall be granted in respect of capital expenditure incurred during the period from 1 January 2013 to 30 June 2018 as follows— Rate of annual allowance – Capital expenditure incurred on Percentage of Base value Cost Industrial premises dedicated to manufacturing 30 – Plant or machinery costing 50,000 rupees or less – 100 Electronic and high-precision machinery, including – 50 computer hardware and software Plant and machinery, excluding passenger car, by – 50 a manufacturing company Scientific research – 50 [Issue 7] I5 – 100 Revised Laws of Mauritius (15) In subsections (14) (h) and (14A)— “green technology equipment expenditure” means any capital expenditure, excluding capital expenditure on passenger car, incurred on— (a) renewable energy; (b) energy-efficient equipment or noise control device; (c) water-efficient plant and machinery and rainwater harvesting equipment and system; (d) pollution control equipment or device, including wastewater recycling equipment; (e) effective chemical hazard control device; (f) desalination plant; (g) composting equipment; or (h) equipment for shredding, sorting and compacting plastic and paper for recycling; “holding company” has the same meaning as in the Companies Act; “specified activity” means— (a) the growing of sugar cane; (b) the milling of sugar; or (c) the processing of sugar cane by-products including the production of firm or continuous electricity for export to the grid through the use of bagasse or coal, as the case may be. Losses (16) Notwithstanding section 59, where a company referred to in subsection (14) (a) has opted to claim annual and investment allowances at the rates prevailing on 30 June 2006 and has losses arising as a result of such claim, such losses may be carried forward and of sugar cane; (b) the milling of sugar; or (c) the processing of sugar cane by-products including the production of firm or continuous electricity for export to the grid through the use of bagasse or coal, as the case may be. Losses (16) Notwithstanding section 59, where a company referred to in subsection (14) (a) has opted to claim annual and investment allowances at the rates prevailing on 30 June 2006 and has losses arising as a result of such claim, such losses may be carried forward and set off against its net income derived in the 5 succeeding income years following the income year in which the capital expenditure has been incurred. Voluntary Disclosure Incentive Scheme (VDIS) (17) Where a person makes, by 31 December 2007, a voluntary disclosure of his undeclared or underdeclared income in respect of the 5 years of assessment ended 30 June 2007, he shall, at the same time, pay tax in accordance with the disclosure at the appropriate rate in force in respect of each of the years of assessment, together with interest at the rate of 0.5 per cent per month as from the date the tax was due and payable. (18) Where the tax and interest under subsection (17) is not paid at the time of the disclosure, any unpaid tax and interest shall carry interest at the rate of 14 per cent per annum. I5 – 101 [Issue 7] Income Tax Act (19) Where a person makes a voluntary disclosure under subsection (17) and the Director-General is satisfied with such disclosure, that person shall be deemed, notwithstanding sections 146, 147, 148 and 149, not to have committed an offence. (20) The disclosure under subsection (17) shall be made in such form and manner as may be determined by the Director-General. Tax Arrears Settlement Scheme (TASS) (21) (a) Where tax arrears as at 31 December 2012 are paid by a person on or before 30 November 2013, any penalty included therein shall be reduced— (i) by 100 per cent where the penalty is charged under sections 101, 109, 110, 111, 121 or 133; and (ii) by 75 per cent where the penalty is charged under section 122, provided that an application for the reduction is made to the Director-General on or before 30 September 2013. (b) In paragraph (a)— “tax arrears”— (a) means tax and penalty due and payable under an assessment issued or a return submitted on or before 30 June 2006; but (b) does not include tax due under an assessment which is pending before the Assessment Review Committee, Supreme Court or Judicial Committee of the Privy Council. (22) (a) Notwithstanding subsection (21), where tax is due as at 31 December 2012 under an assessment issued or a return submitted on or before 1 July 1996, the Director-General may refer the case, whether or not the person has made an application, to the Panel set up under paragraph (b). (b) The Director-General shall set up a Panel consisting of at least 3 officers, to review and revise the tax, penalties and interest outstanding as at 31 December 2012, in such manner as the Panel may deem appropriate, having regard to the person’s financial position or personal circumstance. (c) The Panel may require the person to appear before it, and provide such information as may be required. (d) The Director-General may, pursuant to paragraph (b), enter into an agreement with the person for settlement of the debt. (23) Subsections (21) and (22) shall not apply to any person— (a) who has been convicted on or after 1 July 2001 of an offence relating to; (b) against whom any civil or criminal proce opriate, having regard to the person’s financial position or personal circumstance. (c) The Panel may require the person to appear before it, and provide such information as may be required. (d) The Director-General may, pursuant to paragraph (b), enter into an agreement with the person for settlement of the debt. (23) Subsections (21) and (22) shall not apply to any person— (a) who has been convicted on or after 1 July 2001 of an offence relating to; (b) against whom any civil or criminal proceedings are pending or contemplated in relation to an act of; or (c) in relation to whom an enquiry is being conducted into an act of, [Issue 7] I5 – 102 Revised Laws of Mauritius trafficking of dangerous drugs, arms trafficking, or an offence related to terrorism under the Prevention of Terrorism Act, money laundering under the Financial Intelligence and Anti-Money Laundering Act or corruption under the Prevention of Corruption Act. Tax Liability of Companies (24) Every company which, in respect of the year of assessment 20082009, has a turnover exceeding 100 million rupees and pays tax under Sub-part AA of Part IV during that year of assessment, the company may pay any tax payable in accordance with its return of income for that year of assessment in 3 equal and consecutive yearly instalments starting as from the year of assessment 2008-2009 within the time specified in section 116. (25) Every company which, in respect of the year of assessment 20092010, has a turnover not exceeding 100 million rupees and pays tax under Sub-part AA of Part IV during that year of assessment, the company may pay any tax payable in accordance with its return of income for that year of assessment in 3 equal and consecutive yearly instalments starting as from the year of assessment 2009-2010 within the time specified in section 116. Application of Advance Payment System (26) Notwithstanding any enactment, the provisions of Sub-part AA of Part IV shall, in relation to a company which, in respect of the year of assessment 2008-2009, has a turnover not exceeding 100 million rupees, come into operation on 1 July 2009. Registration of construction projects (27) For the purpose of benefitting from exemption of registration duty and land transfer tax under section 45A (5) of the Land (Duties and Taxes) Act— (a) on the transfer to a company of a plot of freehold land during the period 1 January 2009 to 31 December 2010 for the construction of any building thereon for sale, renting or its own use; or (b) upon transfer, on or before 30 June 2011, by a company of a plot of freehold land together with a building or part of a building thereon or by way of a vente à terme under article 1601-2, or a vente en l’état futur d’achèvement under article 1601-3, of the Code Civil Mauricien, the construction of which has started on or after 1 January 2009, that company may, subject to subsections (28) to (30), register with the Director-General during the period 1 January 2009 to 31 December 2010 for such construction project. (28) Registration under subsection (27) shall be subject to the conditions that— (a) the company is a company incorporated or registered under the Companies Act; continued on page I5 – 103 I5 – 102 (1) [Issue 7] r such construction project. (28) Registration under subsection (27) shall be subject to the conditions that— (a) the company is a company incorporated or registered under the Companies Act; continued on page I5 – 103 I5 – 102 (1) [Issue 7] Revised Laws of Mauritius (b) the total costs of construction of the buildings under the project exceed 50 million rupees by 30 June 2011; (c) the company submits at the time of registration— (i) a brief on the nature of its business; (ii) the site plan, location plan, extent and transcription volume number of the land; (iii) the pre-sale agreement in respect of the land, if any; (iv) a business plan including project components and description, total investment, estimated total costs of construction and implementation schedule indicating the estimated costs of works; (v) the estimated number of jobs to be created during construction and thereafter; and (vi) the Outline Planning Permission (OPP) from the relevant local authority. (29) For the purpose of the exemption of registration duty and land transfer tax, the costs of construction referred to in subsections (28) (b) and (32) (b) shall not include the costs of ancillary infrastructure works such as roads, walls, drains, landscaping and utility services. (30) Subsection (27) shall not apply to a company implementing a project under the Investment Promotion (Real Estate Development Scheme) Regulations 2007. (31) Where a company is registered with the Director-General under subsection (27), the Director-General shall issue to the company a certificate of registration on such terms and conditions, and in such form and manner, as he may determine. Monitoring costs of construction of building (32) For the purpose of monitoring the costs of construction of the building by the Director-General, the company registered under subsection (27) shall— (a) notify the Director-General in writing of the date on which the construction has started; and (b) submit to the Director-General, a report from a quantity surveyor certifying the progress of works and the costs of construction works completed, not later than 15 days after each period of 6 months from the beginning of the construction. Notification to Registrar-General (33) The Director-General shall, notwithstanding section 154, give written notice to the Registrar-General that the company has satisfied or has failed to satisfy the condition specified in subsection (28) (b). I5 – 103 [Issue 6] Income Tax Act Application of subsections (27) to (33) to leasehold land (34) Subsections (27) to (33) shall, subject to subparagraph (b), shall apply to leasehold land. Taxation of income derived by individuals during the period of 1 July to 31 December 2009 (35) Notwithstanding the other provisions of this Act— (a) income derived by an individual in the period 1 July to 31 December 2009 shall be deemed to be derived in the income year ending on 31 December 2009 and shall be taxable in the year of assessment ending on 31 December 2010; (b) subject to the conditions provided under section 27, an individual shall be entitled to an income exemption threshold as follows— (i) Category A – 129,230 rupees; (ii) Category B – 188,460 rupees; (iii) Category C – 220,770 rupees; (iv) Category D – 242,310 rupees; (v) Category E – 153,460 rupees; (vi) Category F – 212,690 rupees; (c) an individual shall not be entitled to claim an income exemption threshold in respect of— (i) Category B or Category F, where the net income and exempt income of his dependent exceed 59,230 rupees; (ii) Category C, where the net income and exempt income of his second dependent exceed 32,310 rupees; (iii) Category D, where the net income and exempt income of his third dependent exceed 21,54 s; (iv) Category D – 242,310 rupees; (v) Category E – 153,460 rupees; (vi) Category F – 212,690 rupees; (c) an individual shall not be entitled to claim an income exemption threshold in respect of— (i) Category B or Category F, where the net income and exempt income of his dependent exceed 59,230 rupees; (ii) Category C, where the net income and exempt income of his second dependent exceed 32,310 rupees; (iii) Category D, where the net income and exempt income of his third dependent exceed 21,540 rupees; (d) where the net income and exempt income of the first dependent, second dependent and third dependent of an individual claiming an income exemption threshold do not exceed 59,230 rupees, 32,310 rupees and 21,540 rupees respectively, the net income of the dependent or dependents shall be deemed to be, and shall be added to, the net income of that individual; (e) every individual who, in the CPS quarter ending 30 September 2009, derives gross income falling under Sub-part B of Part VIII— (i) which exceeds the CPS threshold, whether or not he has a chargeable income for that CPS quarter; or [Issue 6] I5 – 104 Revised Laws of Mauritius (ii) which does not exceed the CPS threshold, but has a chargeable income for that CPS quarter, shall submit to the Director-General in respect of that CPS quarter, a Statement of Income not later than 31 December 2009 and at the same time pay any tax payable in accordance with that Statement of Income; (f) the computation of chargeable income and tax thereon under paragraph (e) shall be governed by the conditions specified under Sub-part B of Part VIII; (g) the due date for the submission of return and payment of tax under section 112 for the income year ending on 31 December 2009 shall be 5 April 2010; (h) for the purpose of Sub-Part BB of Part VIII and section 112 (c), the income threshold of 385,000 rupees is reduced to 207,310 rupees in respect of the income year ending on 31 December 2009; (i) the National Residential Property Tax imposed by section 111M on an individual owning a residential property referred to in Subpart BB of Part VIII shall be calculated in respect of the income year ending on 31 December 2009 at 50 per cent of the rates specified in the Seventh Schedule; (j) an individual shall be deemed to be resident in Mauritius in the income year ending on 31 December 2009 where he— (i) has his domicile in Mauritius unless his permanent place of abode is outside Mauritius; (ii) has been present in Mauritius in that income year, for a period of, or an aggregate period of, 90 days or more; or (iii) has been present in Mauritius in that income year and the 2 preceding income years, for an aggregate period of 225 days or more. CSR Fund (36) The amount of profit that a company is required to transfer to the CSR Fund under section 50L out of its book profit derived in the year forming the basis for the year of assessment ending on 30 June 2010 shall be calculated by applying the following formula— 2 × b × n 100 12 Where— b is the book profit derived by the company in the year forming the basis for the year of assessment ending on 30 June 2010; n is the number of months starting on 1 July 2009 to the end of the accounting year of the company forming the basis for the year of assessment ending on 31 December 2010. I5 – 105 [Issue 6] Income Tax Act Tax credit in respect of tax withheld from interest in income year 2010 (37) (a) Where income tax has been deducted by a financial institution from interes 100 12 Where— b is the book profit derived by the company in the year forming the basis for the year of assessment ending on 30 June 2010; n is the number of months starting on 1 July 2009 to the end of the accounting year of the company forming the basis for the year of assessment ending on 31 December 2010. I5 – 105 [Issue 6] Income Tax Act Tax credit in respect of tax withheld from interest in income year 2010 (37) (a) Where income tax has been deducted by a financial institution from interest made available to an individual in the income year ending 31 December 2010, the individual may claim a credit in respect of the amount of income tax so deducted in 2 equal instalments from his tax liability in respect of the income years ending 31 December 2011 and 31 December 2012. (b) Any credit under subparagraph (a) remaining unrelieved from the tax liability of the individual in respect of the income year ending 31 December 2011, shall be carried forward to the following income year ending 31 December 2012. (c) Any credit remaining unrelieved from the tax liability of the individual in respect of the income year ending 31 December 2012, shall be refunded to the individual, following the submission of his annual return of income under section 112. Effective date of items 18 to 23 in Sub-Part C of Part II of Second Schedule (38) Notwithstanding any enactment, items 18 to 23 in Sub-Part C of Part II of the Second Schedule shall be deemed to have had effect on 1 January 2011. Voluntary Disclosure of Income Arrangement (VD1A) (39) (a) Where, on or before 30 September 2013, a person makes a voluntary disclosure of his undeclared income in respect of any year of assessment preceding the year of assessment ending on 31 December 2013, he shall, at the same time, pay tax on that income at the rate of 15 per cent of his chargeable income, free from any penalty and interest that may have become due in accordance with this Act. (b) The tax liability in respect of any undeclared income disclosed under paragraph (a) shall be computed, but for the tax rate, in accordance with the provisions of this Act in force in respect of the year for which the income is declared. (40) Where a person who has been assessed to tax in respect of a year of assessment— (a) has objected to the assessment under section 131A; (b) has lodged a representation with the Clerk to the Assessment Review Committee; or (c) has appealed to the Supreme Court or to the Judicial Committee of the Privy Council, and the objection, representation or appeal is pending as at 30 September 2012, he may apply to the Director-General for the income assessed to be considered as a voluntary disclosure of his undeclared income under subsection (39). [Issue 6] I5 – 106 Revised Laws of Mauritius (41) Where a person who has made an application under subsection (40) withdraws his objection, representation or appeal, as the case may be, his tax liability in respect of the income assessed shall be re-computed without any penalty and interest that may have become due and after taking into account any agreement reached between the taxpayer and the DirectorGeneral on any item under dispute. (42) (a) Where the tax under subsection (39) or (41), as the case may be, is not paid in full on or before 30 September 2013, any unpaid tax shall carry interest at the rate of 0.5 per cent per month. (b) The disclosure under this section shall be made in such form and manner, and the payment of any tax liability shall be g any penalty and interest that may have become due and after taking into account any agreement reached between the taxpayer and the DirectorGeneral on any item under dispute. (42) (a) Where the tax under subsection (39) or (41), as the case may be, is not paid in full on or before 30 September 2013, any unpaid tax shall carry interest at the rate of 0.5 per cent per month. (b) The disclosure under this section shall be made in such form and manner, and the payment of any tax liability shall be governed by such other conditions, as the Director-General may determine. (c) Failure to comply with any condition under this subsection shall entail the withdrawal of any benefit under this section to the taxpayer. (43) Where a person makes a voluntary disclosure of his undeclared income under subsection (39) and the Director-General is satisfied with such disclosure, that person shall be deemed, notwithstanding sections 146, 146B, 147, 148 and 149, not to have committed an offence. (44) Subsections (39) to (43) shall not apply to any person— (a) who has been convicted on or after 1 July 2001 of an offence relating to; (b) against whom any civil or criminal proceedings are pending or contemplated in relation to an act of; or (c) in relation to whom an enquiry is being conducted into an act of, trafficking of dangerous drugs, arms trafficking, or an offence related to terrorism under the Prevention of Terrorism Act, money laundering under the Financial Intelligence and Anti-Money Laundering Act or corruption under the Prevention of Corruption Act. Registration of construction of housing estates (45) For the purpose of benefiting from exemption of registration duty and land transfer tax under section 27 of the Registration Duty Act and section 45A (9) of the Land (Duties and Taxes) Act— (a) on the transfer to a company of a plot of freehold land during the period 1 January 2012 to 30 June 2019 for the construction of any housing estate thereon for sale; or (b) on transfer, not later than 30 June 2020, by the company of a plot of land together with a housing unit or by way of a vente en l’état futur d’achèvement under article 1601-3 of the Code Civil Mauricien, the construction of which has started on or after 1 January 2012, that company may, subject to subsections (47) and (48), register with the Director-General during the period from 1 January 2012 to 30 June 2019 for such construction of housing estates. I5 – 107 [Issue 9] Income Tax Act (46) Registration under subsection (45) shall be subject to the conditions that— (a) the company is a company incorporated or registered under the Companies Act; (b) the company submits at the time of registration— (i) a brief on the nature of its business; (ii) the site plan, location plan, extent and transcription volume number of the land; (iii) the pre-sale agreement in respect of the land, if any; (iv) a business plan, including project components and description, total investment, estimated total costs of construction and implementation schedule; and (v) the Outline Planning Permission (OPP) from the relevant local authority; (c) the housing estate comprises at least 5 residential units, the construction of which shall be completed not later than 31 December 2019; and (d) the sale value of a residential unit shall, where the registration is made— (i) from 1 January 2012 to 31 December 2012, not exceed 2.5 million rupees; or (ii) from 1 January 2014 to 30 June 2019, not exceed 6 million rupees. (47) Where ion and implementation schedule; and (v) the Outline Planning Permission (OPP) from the relevant local authority; (c) the housing estate comprises at least 5 residential units, the construction of which shall be completed not later than 31 December 2019; and (d) the sale value of a residential unit shall, where the registration is made— (i) from 1 January 2012 to 31 December 2012, not exceed 2.5 million rupees; or (ii) from 1 January 2014 to 30 June 2019, not exceed 6 million rupees. (47) Where a company is registered with the Director-General under subsection (45), the Director-General shall issue to the company a certificate of registration on such terms and conditions, and in such form and manner, as he may determine. (48) For the purpose of monitoring the construction of the housing estate by the Director-General, the company registered under subsection (45) shall notify the Director-General in writing of the date on which the construction has started and the date the construction of the housing estate is completed. Notification to Registrar-General (49) The Director-General shall, notwithstanding section 154, give notice in writing to the Registrar-General that a company has satisfied or has failed to satisfy the condition specified in subsection (46). (50) (a) Subject to the other provisions of this subsection, where a company which carries on in Mauritius the business of manufacturing or producing any of the goods or products specified in column 1 of the Ninth Schedule, has incurred capital expenditure exceeding 100 million rupees, during the period 1 January 2014 to 30 June 2016, on new plant and machinery and such plant [Issue 9] I5 – 108 Revised Laws of Mauritius and machinery is used in that activity, it shall be allowed a tax credit, by way of deduction from its income tax otherwise payable in respect of the year of acquisition and for each of the 2 subsequent income years, of an amount equal to 5 per cent per annum of the cost of the plant and machinery. (b) Subject to paragraph (c), where the deduction under paragraph (a) in respect of an income year exceeds the amount of income tax otherwise payable for that income year, the excess may be carried forward to the following income year. (c) No deduction under paragraph (b) in respect of a capital expenditure shall be carried forward beyond a period of 5 consecutive income years following the income year in which the capital expenditure was incurred. (d) Where in an income year the plant and machinery is sold or otherwise transferred, within a period of 5 years from the date of its acquisition, the tax credit shall be withdrawn and any tax credit claimed shall be deemed to be income tax payable to the Director-General in that income year. (e) In this subsection— “plant and machinery” does not include motor cars. (50A) (a) Subject to this subsection, where during the period 1 July 2016 to 30 June 2020— (i) a company which, in Mauritius, carries on the business of manufacturing or producing any of the goods or products specified in the Ninth Schedule has incurred capital expenditure on new plant and machinery and such plant and machinery is used in that activity; or (ii) a company has invested in the share capital of a subsidiary company engaged primarily in the setting up and management of an accredited business incubator, it shall be allowed, by way of a deduction from its income tax otherwise payable in respect of the year of acquisition or investment and for each of the 2 s ing any of the goods or products specified in the Ninth Schedule has incurred capital expenditure on new plant and machinery and such plant and machinery is used in that activity; or (ii) a company has invested in the share capital of a subsidiary company engaged primarily in the setting up and management of an accredited business incubator, it shall be allowed, by way of a deduction from its income tax otherwise payable in respect of the year of acquisition or investment and for each of the 2 subsequent income years, a tax-credit— (A) at the rate specified in the Ninth Schedule; or (B) of an amount equal to 15 per cent of the investment in the share capital of a subsidiary company engaged primarily in the setting up and management of an accredited business incubator subject to a maximum of 3 million rupees. (b) Subject to paragraph (c), where the deduction under paragraph (a) in respect of an income year exceeds the amount of income tax otherwise payable for that income year, the excess may be carried forward to the following income year. I5 – 109 [Issue 9] Income Tax Act (c) No deduction under paragraph (b) in respect of a capital expenditure shall be carried forward beyond a period of 10 consecutive income years following the income year in which the capital expenditure was incurred. (d) Where, in an income year, the plant and machinery or the shares are sold or otherwise transferred, within a period of 5 years from the date of its acquisition, the tax credit claimed shall be deemed to be income tax payable to the Director-General in that income year. (e) In this subsection— “plant and machinery” does not include motor cars. Taxation of income derived by individuals during the period 1 January to 30 June 2015 (51) Notwithstanding this Act— (a) income derived by an individual in the period 1 January to 30 June 2015 shall be deemed to be derived in the income year ending on 30 June 2015 and shall be taxable in the year of assessment ending on 30 June 2016; (b) subject to the conditions provided under section 27, an individual shall be entitled to an income exemption threshold as follows— (i) Category A – 137,500 rupees; (ii) Category B – 192,500 rupees; (iii) Category C – 222,500 rupees; (iv) Category D – 242,500 rupees; (v) Category E – 162,500 rupees; (vi) Category F – 217,500 rupees; (c) an individual shall not be entitled to claim an income exemption threshold in respect of— (i) Category B or F, where the total of the net income and exempt income of his dependent exceeds 55,000 rupees; (ii) Category C, where the total of the net income and exempt income of his second dependent exceeds 30,000 rupees; (iii) Category D, where the total of the net income and exempt income of his third dependent exceeds 20,000 rupees; (d) where the total of the net income and exempt income of the first dependent, second dependent and third dependent of an individual claiming an income exemption threshold does not exceed 55,000 rupees, 30,000 rupees and 20,000 rupees respectively, the net income of the dependent or dependents shall be deemed to be, and shall be added to, the net income of that individual; [Issue 9] I5 – 110 Revised Laws of Mauritius (e) Additional Exemption— (i) where the dependent under Category B, C, D or F is a child pursuing a non-sponsored full-time undergraduate course at a recognised tertiary educational institution, the person shall, in addition to the income exemption threshold he is entitled to, be eligible to an additional exe ees respectively, the net income of the dependent or dependents shall be deemed to be, and shall be added to, the net income of that individual; [Issue 9] I5 – 110 Revised Laws of Mauritius (e) Additional Exemption— (i) where the dependent under Category B, C, D or F is a child pursuing a non-sponsored full-time undergraduate course at a recognised tertiary educational institution, the person shall, in addition to the income exemption threshold he is entitled to, be eligible to an additional exemption of— (A) 40,000 rupees in respect of each dependent pursuing his undergraduate course in Mauritius at an institution recognised by the Tertiary Education Commission established under the Tertiary Education Commission Act; or (B) 62,500 rupees in respect of each dependent pursuing his undergraduate course outside Mauritius at a recognised institution; (ii) no exemption under subparagraph (i) shall be allowed— (A) where the tuition fees for the period 1 January to 30 June 2015, excluding administration and student union fees, are less than 44,500 rupees for a child following an undergraduate course in Mauritius; or (B) where the income referred to in section 27A (5) of the person, or the spouse of the person, as the case may be, exceeds one million rupees for the period 1 January to 30 June 2015; (C) in respect of the same dependent for more than 3 and a half consecutive years; (f) the relief under section 27A (1) and (2) shall be allowed for 5 consecutive years starting as from January 2011 and shall be— (i) 60,000 rupees, in the case of a couple where either spouse is a dependent spouse; (ii) 60,000 rupees, in the case of a couple where neither spouse is a dependent spouse or, at the spouses' option, divided equally for each spouse; or (iii) in any other case, 60,000 rupees provided that in the case of a couple, the relief shall not exceed, in the aggregate, 60,000 rupees, or the actual amount, whichever is the lesser; (g) no relief under section 27A (1) shall be allowed where the income of the person, or the spouse of the person, as the case may be, exceeds one million rupees for the period 1 January to 30 June 2015; continued on page I5 – 111 I5 – 110 (1) [Issue 9] Revised Laws of Mauritius (h) the relief under section 27B (2) shall not exceed the amount specified in column 2 corresponding to the category specified in column 1 of the following table— COLUMN 1 COLUMN 2 Category claimed as Income Exemption Premium allowable Threshold (Rs) Category A (no dependent) 6,000 Category B (one dependent) 6,000 for self + 6,000 for dependent Category C (2 dependents) 6,000 for self + 6,000 for first dependent + 3,000 for second dependent Category D (3 dependents) 6,000 for self + 6,000 for first dependent + 3,000 for second dependent + 3,000 for third dependent Category E (retired or disabled person with no 6,000 dependent) Category F (retired or disabled person having 6,000 for self + 6,000 one dependent) for dependent (i) where an individual is required under section 106 to submit a CPS Statement of Income for the quarter ended 31 March 2015, the due date for the submission of the CPS Statement and the payment of tax shall be not later than 26 June 2015; (j) the computation of chargeable income and tax thereon under paragraph (i) shall be governed by the conditions specified in Sub-part B of Part VIII; (k) the due date for the submission of return and payment of tax under section 112 for the income year ending on 30 June 2015 shall be 30 September 2015; (l) notwithstanding paragraph (k), where an individual submits his return under section 112 electronically through the computer system of the Authority and at the same time makes payment, through Internet banking, to the Director-General, of the tax payable in accordance with the return, the due date for the submission and for payment shall be 15 October 2015; (cid:2)m(cid:3) an individual shall be considered to be resident in Mauritius in the income year ending on 30 June 2015 where he— (i) has his domicile in Mauritius unless his permanent place of abode is outside Mauritius; (ii) has been present in Mauritius in that income year for a period of, or an aggregate period of, 90 days or more; or I5 – 111 [Issue 7] Income Tax Act (iii) has been present in Mauritius in that income year and the 2 preceding income years for an aggregate period of 225 days or more; (n) the Statement of Emoluments and Tax Deduction required to be given by an employer to an employee and the Return of employees required to be given by an employer to the Director-General under regulation 22 of the Income Tax Regulations 1996 not later than 15 August 2015 shall be in respect of the period 1 January 2015 to 30 June 2015. Taxation of income derived by persons other than individuals during the period 1 January to 30 June 2015 (52) Notwithstanding this Act— (a) where a company has an approved return date ending on any date falling on or between 1 January and 30 June 2015, the return required to be submitted under section 116 shall be for the year of assessment 2015/2016 which shall follow the return required to be submitted under that section for the year of assessment 2014 and this shall be taken into account when determining the time limit to make assessments under section 130; (b) where a company has an approved return date ending on any date falling on or between 1 July and 31 December 2015, the return required to be submitted under section 116 shall be for the year of assessment 2015/2016 which shall follow the return required to be submitted under that section for the year of assessment 2015 and this shall be taken into account when determining the time limit to make assessments und into account when determining the time limit to make assessments under section 130; (b) where a company has an approved return date ending on any date falling on or between 1 July and 31 December 2015, the return required to be submitted under section 116 shall be for the year of assessment 2015/2016 which shall follow the return required to be submitted under that section for the year of assessment 2015 and this shall be taken into account when determining the time limit to make assessments under section 130; (c) where a company has an approved return date ending on any date falling on or between 1 January and 30 June 2015, the company shall not carry forward and set-off any unrelieved amount of loss under section 59 (b), subject to section 59 (c), in its return required to be submitted under section 116 for the year of assessment 2015/2016 where the loss relates to the year of assessment 2009; (d) where a company has an approved return date ending on any date falling on or between 1 July and 31 December 2015, the company shall not carry forward and set-off any unrelieved amount of loss under section 59 (b), subject to section 59 (c), in its return required to be submitted under section 116 for the year of assessment 2015/2016 where the loss relates to the year of assessment 2010; (e) where a person has an approved return date ending on any date falling in December 2014, the due date for submission of return and payment of tax under section 116 shall be 26 June 2015; [Issue 7] I5 – 112 Revised Laws of Mauritius (f) the statement required to be given by a payer to a payee and to the Director-General under section 111K (1), not later than 15 August 2015 and shall be in respect of the period 1 January 2015 to 30 June 2015; (g) the returns and statements required to be submitted or given under sections 119 (1) and (2), 119A (1) and 120 (1), not later than 30 September 2015 and shall be in relation to the period 1 January 2015 to 30 June 2015. Obligation to Withhold PAYE for September 2016 (53) Every employer shall, for the purpose of withholding income tax in accordance with section 96 for the month of September 2016, take into account the amount of income exemption threshold claimed by the employee in his Employee Declaration Form in respect of the income year ending 30 June 2016. Excess CSR Payment (54) Where on the coming into operation of section 50L, a company has paid out its CSR Fund, a sum in excess of the amount provided for under that Fund, the excess amount referred to in the repealed section 50L (6) may be carried forward and offset in equal instalments against any amount to be remitted under section 50L (2) (a) in respect of 5 succeeding years starting as from year of assessment 2016/2017. [S. 161A amended by s. 46 (4) (d) (i) of Act 13 of 2001 w.e.f. 1 December 2001; s. 11 (w) of Act 23 of 2001 w.e.f. the income year commencing on 1 July 2001; s. 9 (n) of Act 18 of 2003 w.e.f. 1 July 2002; s 11 (u) (i) of Act 28 of 2004 w.e.f. 26 August 2004; s. 103 (4) (c) of Act 35 of 2004 w.e.f. 10 November 2004; s. 18 (zze) of Act 15 of 2006 w.e.f. 7 August 2006; s. 17 (zf) (v) of Act 17 of 2007 w.e.f. 1 July 2007; 22 August 2007; 1 July 2008 in respect of the year of assessment commencing on 1 July 2008 and in respect of every subsequent year of assessment; 1 July 2009 in respect of the year of assessment commencing on 1 July 2009 and in respect of every subsequent year of assessment; s. 15 (r) (i) of Act 18 of 2008 w.e.f. 1 July 2007; s t 2004; s. 103 (4) (c) of Act 35 of 2004 w.e.f. 10 November 2004; s. 18 (zze) of Act 15 of 2006 w.e.f. 7 August 2006; s. 17 (zf) (v) of Act 17 of 2007 w.e.f. 1 July 2007; 22 August 2007; 1 July 2008 in respect of the year of assessment commencing on 1 July 2008 and in respect of every subsequent year of assessment; 1 July 2009 in respect of the year of assessment commencing on 1 July 2009 and in respect of every subsequent year of assessment; s. 15 (r) (i) of Act 18 of 2008 w.e.f. 1 July 2007; s. 15 (r) (ii) of Act 18 of 2008 w.e.f. 19 July 2008; s. 8 (b) (i) of Act 1 of 2009 w.e.f. 16 April 2009; s. 8 (b) (ii) of Act 1 of 2009 w.e.f. 1 January 2009; s. 21 (w) of Act 14 of 2009 w.e.f. 1 July 2009; s. 9 (za) of Act 10 of 2010 w.e.f. 24 December 2010; s. 13 (c) of Act 20 of 2011 w.e.f. 16 July 2011; ss. 8 (zp) of Act 37 of 2011 w.e.f. 15 December 2011; 1 January 2012; s. 12 (v) of Act 26 of 2012 w.e.f. 22 December 2012; s. 9 (r) of Act 26 of 2013 w.e.f. 1 January 2014 in respect of the income year commencing on 1 January 2014 and in respect of every subsequent income year; s. 24 (zp) of Act 9 of 2015 w.e.f. 14 May 2015; s. 27 (zb) of Act 18 of 2016 w.e.f. 7 September 2016.] 162. – 163. — I5 – 113 [Issue 9] Income Tax Act FIRST SCHEDULE [Section 4] Rate of income tax 15 per cent [First Sch. amended by s. 4 (s) of Act 10 of 1998 w.e.f. 21 July 1998; s. 10 (t) of Act 18 of 1999 w.e.f. 1 July 1999 in respect of the income year commencing on 1 July 1999 and in respect of every subsequent income year; s. 12 (ac) of Act 25 of 2000 w.e.f income year commencing on 1 July 2000; s. 46 (4) (e) of Act 13 of 2001 w.e.f. 1 December 2001; s. 11 (x) (i), (iii), (iv) and (v) of Act 23 of 2001 w.e.f. income year commencing on 1 July 2001; GN 124 of 2002 w.e.f. 20 August 2002; s. 9 (o) of Act 18 of 2003 w.e.f. the year of assessment commencing on 1 July 2003; s. 11 (v) of Act 2004 w.e.f. 1 July 2004; s. 156 (3) (g) of Act 22 of 2005 w.e.f. 28 September 2007; repealed and replaced by s. 18 (zzf) of Act 15 of 2006 w.e.f. 1 July 2006 in respect of the income year commencing on 1 July 2006 and in respect of every subsequent income year, in so far as it relates to individuals, w.e.f. 1 July 2007 in respect of the year of assessment commencing on 1 July 2007 and in respect of every subsequent year of assessment in so far as it relates to companies; s. 17 (zg) of Act 17 of 2007 w.e.f. 1 July 2007 in so far as it relates to individuals, w.e.f. 1 July 2008 in so far as it relates to companies; s. 9 (zb) of Act 10 of 2010 w.e.f. 24 December 2010; s. 8 (zq) of Act 37 of 2011 w.e.f. 5 November 2011.] SECOND SCHEDULE [Sections 2 and 7] PART I – EXEMPT BODIES OF PERSONS A benevolent association A charitable institution, a charitable Foundation or a charitable trust A company holding a Category 2 Global Business Licence under the Financial Services Act An equity fund The Food and Agricultural Research and Extension Institute An international organisation approved by the competent authority An investment club registered as such under rules made by the Financial Services Commission or taken to be so registered under the Securities Act A local authority The Mauritius Cane Industry Authority The Mauritius Sugar Syndicate The National Pensions Fund established under the National Pensions Act A société de secours mutuels A special purpose fund established under the Financial Services Act The Sugar Industry Pension Fund The Sugar Insurance Fund A superannuation fund [Issue 9] I5 thority An investment club registered as such under rules made by the Financial Services Commission or taken to be so registered under the Securities Act A local authority The Mauritius Cane Industry Authority The Mauritius Sugar Syndicate The National Pensions Fund established under the National Pensions Act A société de secours mutuels A special purpose fund established under the Financial Services Act The Sugar Industry Pension Fund The Sugar Insurance Fund A superannuation fund [Issue 9] I5 – 114 Revised Laws of Mauritius A trade union A trust in respect of a superannuation fund — [Part I amended by s. 17 (zh) (i) of Act 17 of 2007 w.e.f. 22 August 2007; s. 156 (3) of Act 22 of 2005 w.e.f. 28 September 2007; s. 51 (1) (i) of Act 8 of 2012 w.e.f. 1 July 2012; s. 12 (w) (i) of Act 26 of 2012 w.e.f. 22 December 2012; s. 22 (4) of Act 21 of 2013 w.e.f. 14 February 2014.] PART II – EXEMPT INCOME Sub-Part A – Emoluments