Section 18: Expenditure incurred in production of income

18. Expenditure incurred in production of income (1) Any expenditure or loss shall be deductible from the gross income, other than gross income specified in section 10 (1) (a), of a person in the income year in which it is incurred to the extent to which it is exclusively incurred in the production of his gross income, other than gross income specified in section 10 (1) (a), for that income year. (2) Any expenditure which satisfies the requirements of subsection (1), on or in relation to— (a) minerals, trees or wood which when realised, produces gross income under section 10 (1) (b); or (b) immovable property, including the cost of acquisition, which, when realised, produces gross income under section 10 (3) (c), shall be deductible from the gross income, other than gross income specified in section 10 (1) (a), of a person in the income year in which he derives the gross income specified in this subsection. (3) Any expenditure, which satisfies the requirements of subsection (1), incurred by a person on the repair of premises, machinery or plant, or on rent, or on export duties, rates and taxes, other than income tax or any other tax on income or profits, shall be deductible from his gross income, other than gross income specified in section 10 (1) (a), in the income year in which the expenditure is incurred. (4) An amount equal to 200 per cent of the expenditure incurred by a person in an income year, and which satisfies the requirements of subsection (1), shall be deductible from his gross income in that income year where the expenditure is incurred on— (a) emoluments in respect of a disabled person; or (b) emoluments and training costs in respect of an employee employed in any business set up in Rodrigues. [Issue 9] I5 – 22 Revised Laws of Mauritius (5) Subject to subsection (1) and section 26 (1) (b) and (3), where any expenditure or loss incurred by a corporation holding a Category 1 Global Business Licence under the Financial Services Act or by a bank holding a banking licence under the Banking Act, is not directly attributable to either its income derived from Mauritius or its foreign source income, the corporation or the bank, as the case may be, shall forward, together with its return of income which is required under this Act, a certificate from a qualified auditor certifying that such expenditure or loss has been apportioned in a fair and reasonable manner, after taking into account any expenditure or loss incurred in the production of exempt income. (6) (a) Notwithstanding subsection (1) but subject to paragraph (b), any solidarity levy payable in an income year shall be deductible from the gross income referred to in section 10 (1) (b) in that income year. (b) Where a deduction under paragraph (a) has been allowed in an income year and such solidarity levy is refunded in a subsequent income year, the deduction allowed shall be withdrawn and the amount of the deduction so withdrawn shall be deemed to be gross income of the person in the income year in which the refund is made. [S. 18 inserted by Act 18 of 1999; amended by s. 19 (b) of Act 14 of 2005 w.e.f. 1 July 2006; s. 18 (g) of Act 15 of 2006 w.e.f. 1 July 2006; s. 9 (d) of Act 10 of 2010 w.e.f. the year of assessment 2012.]