The Finance (Miscellaneous Provisions) Act 2018: Changes to the global business sector - Africa Legal Network
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The Finance (Miscellaneous Provisions) Act 2018: Changes to the global business sector
THE FINANCE (MISCELLANEOUS PROVISIONS) ACT 2018:
CHANGES TO THE GLOBAL BUSINESS SECTOR
In this document, Axis Fiduciary Ltd in association with BLC Robert & Associates address some of the salient features of
legislative amendments touching the global business sector which have been introduced by the Finance (Miscellaneous
Provisions) Act (the “Finance Act”) passed by the National Assembly on 31 July 2018. The Finance Act gives effect to
the measures announced in Budget Speech 2018-2019 to revamp and further modernise the global business sector. In
Part I, we address 5 main aspects of the legislative developments: (A) Changes to the existing regulatory regimes, (B)
New obligations for structuring vehicles (C) Changes to the existing tax regime, (D) Changes to the banking and finance
legal regime, and (E) AML/CFT compliance. In Part II, we address other legislative amendments which are relevant to the
activities within the global business sector.
A. Changes to existing regulatory requirements Authorised Company - A corporation which proposes to
conduct or conducts business principally outside Mauritius
Changes brought to the licensing of entities holding Global (or with such category of persons as may be specified in the
Business Licences Categories 1 and 2 - The major change FSC Rules) and which has its place of effective management
to the Financial Services Act 2007 (the “FSA”) is that the outside Mauritius and of which the majority of shares/voting
Global Business Category 1 Licence (“GBL1”) will henceforth rights/legal/beneficial interest (other than bank, licensed by
be known as the “Global Business Licence” (“GBL”) whilst the Bank of Mauritius, and incorporated under the Companies
the Category 2 Global Business Licence (“GBL2”) is being Act 2001) are held or controlled by a non-citizen of Mauritius,
abolished and replaced by the “Authorised Company”. must apply to the FSC, through a management company, for
Any corporation, other than an Authorised Company (as an authorisation.
described below), which proposes to conduct or conducts
business principally outside Mauritius (or with such category Responsibilities of registered agent - The registered agent of
of persons as may be specified in FSC Rules) and of which the the Authorised Company will be responsible to provide such
majority of shares or voting rights or the legal or beneficial services which the company will require in Mauritius; e.g., (i)
interest (other than a bank licensed by the Bank of Mauritius filing returns and other documents under the tax legislation,
and such other corporation as may be specified in FSC Rules) (ii) receiving and sending communications from and to the
are held or controlled, as the case may be, by a person who is FSC, the Mauritius Revenue Authority (“MRA”) and Registrar
not a citizen of Mauritius, will need to apply for a GBL from of Companies (“ROC”), (iii) keeping records of the company
the Financial Services Commission (the “FSC”). The FSC will and (iv) taking measures to combat money laundering and
cease to issue the GBL2 as from January 2019, subject to the financing of terrorism and related offences. The FSC may
grandfathering provisions fully set out below. impose other obligations under the FSC Rules.
Requirements of substance for a GBL - With the amendments Beneficial owners and trusts - In addition to existing record
to the FSA, a corporation which holds a GBL must at all keeping obligations which a licensee already has under the
times carry out its core income generating activities in, or FSA, the licensee will need to keep a register of beneficial
from, Mauritius by employing, either directly or indirectly, a owners of its customers. A similar obligation is imposed on
reasonable number of suitably qualified persons to carry out qualified trustees. A qualified trustee will be required to keep
the core activities and having a minimum level of expenditure, a register of any trust under its administration or trusteeship
which is proportionate to its level of activities. It is to be and record such information as the FSC may determine.
noted that the previous requirements for a corporation to
hold a GBL 1, namely that it is (i) managed and controlled The FSC may also determine that other information must be
from Mauritius (together with the list of conditions) and (ii) kept. This new information recording obligation applies to
administered by a management company licensed by the FSC both existing and new customers.
will continue to apply to the newly styled GBL entity.
2 BLC ROBERT | A XIS FINANCE AC T PUBLIC ATION
Finally, in the discharge of its functions, the FSC may request no objection from the Chief Executive of the FSC and the
a licensee to produce due diligence verification information Director-General of the MRA.
relating to the beneficial owners of any person acting on
behalf of its customers. Where the Registrar is satisfied that a limited partnership has
ceased to carry on business and that there is no other reason
Grandfathering - In order to ensure a smooth transition to the for the limited partnership to continue in existence, he will
new regulatory environment for the global business sector, by notice in writing inform the limited partnership that he
the Finance Act provides for the following grandfathering proposes to remove it from the Register. Other instances
provisions: where the Registrar may exercise such powers are (i) failure
to pay any fees payable under the Limited Partnerships Act
• A corporation that was licensed as a GBL1 on or before 16 (ii) failure to file a financial statement, financial summary or
October 2017 will be grandfathered till 30 June 2021. As annual return.
from that date, the corporation will be deemed to hold
a GBL. Restoration of name to Register - The limited partnership, a
• A corporation that was licensed as a GBL1 after 16 October creditor or a liquidator may apply to the Court to have the
2017 will be grandfathered only until 31 December 2018 name of the limited partnership restored within 5 years from
after which it will be deemed to hold a GBL. the date of removal. Prior to ordering the restoration of the
• A corporation that was licensed as a GBL2 on or before 16 limited partnership, the Court should (i) be satisfied that
October 2017 will be grandfathered till 30 June 2021. As the limited partnership was still carrying on business or that
from that date, the GBL2 licence will lapse. there was another reason which prevailed for it to carry on
• A corporation that was licensed as a GBL2 after 16 October business and (ii) it would be fair and reasonable for the name
2017 will be grandfathered only until 31 December 2018 to be restored.
after which the licence will be deemed to have lapsed.
• Limited Liability Partnerships (“LLPs”)
B. New obligations for structuring vehicles
• Limited Partnerships (“LPs”) Disclosure of beneficial owner and ultimate beneficial owner -
An LLP will now be required to maintain a register of partners
Disclosure of beneficial owner and ultimate beneficial at its registered office. The register should contain the name
owner - If a partner is a nominee, its beneficial owner or of the beneficial owner or ultimate beneficial owner where
ultimate beneficial owner should be disclosed in the register the partner is a nominee. Furthermore, where an alteration
of partners. A “beneficial owner” or “ultimate beneficial or entry is made to the register, the latter should be filed with
owner” is a natural person who holds by himself or by his the Registrar of Limited Liability Partnerships within 14 days
nominee not less than 25% of the aggregate voting power of the change to the register.
exercisable at a meeting of partners.
The same treatment regarding disclosure of information
Information pertaining to beneficial owner or ultimate pertaining to beneficial owners or ultimate beneficial owners
beneficial owner is confidential and the Registrar of Limited of LPs shall apply to LLPs.
Partnerships cannot disclose such information to any person
unless required by the beneficial owner or ultimate beneficial Removal from Register - Another change to the LLP regulatory
owner, for the purposes of an investigation or enquiry or if regime is that any partner of an LLP may request the Registrar
ordered by a Court or Judge in Chambers. to remove the LLP from the register provided that a no-
objection statement from the Chief Executive of the FSC and
Record keeping - In the same vein, where any alteration or the Director-General of the MRA accompanies the request.
entry is made to the register of partners, the partnership will
be required to file the updated register with the Registrar of • Foundations Act
Limited Partnerships within 14 days of the change. Limited
partnerships will need to maintain these records at their Disclosure of beneficial owner and ultimate beneficial owner
registered office for 7 years even if the partnerships have - An obligation is imposed on foundations to keep records
been removed from the Register of Limited Partnerships or of the name of the beneficial owner and in cases where the
dissolved. beneficiary is a nominee, the name of the beneficial owner or
of the ultimate beneficial owner. The term beneficial owner
Removal from Register - Two additional means through which has the same meaning as specified in the Companies Act.
a limited partnership may be removed from the Register Furthermore, contrary to LPs and LLPs, it is clearly specified
of Limited Partnerships have been introduced: (i) removal that the term ‘nominee’, in the context of a foundation, has
by the Registrar, or (ii) removal by any partner subject to the same meaning as in the Companies Act.
3 BLC ROBERT | A XIS FINANCE AC T PUBLIC ATION
It is to be noted that the legislator has been mindful of the Foreign source income: income not derived from Mauritius
fact that foundations are most commonly used in wealth - The Income Tax Act (the “ITA”) is amended to provide that
management structures. Consequently, except in certain “foreign source income” shall no longer include (i) income
circumstances, details of the beneficial owner or ultimate derived by a GBL1 from its transactions with non-residents or
beneficial owner does not form part of the pool of publicly corporations holding a global business licence and (ii) income
available information. derived by banks from non-residents or corporations holding
a global business licence. Further to changes brought to the
Record keeping - Records kept by management companies ITA, entities incorporated in Mauritius shall be treated as
will be required to be kept for 5 years as from the completion non-residents for tax purposes (and therefore exempt from
of the transaction, act or operation to which they relate even income tax) if its place of effective management is outside of
if the Foundation is removed from the register. Mauritius. Such an entity shall be required to submit a return
of income to the MRA within 6 months from its year end.
Removal from Register - A founder or beneficiary may also
request the Registrar to remove the foundation from the It is to be noted however that income derived by a corporation
register in the same manner as set out above for LPs and LLPs. that has been issued with a GBL1 on or before 16 October
2017, from its transactions with non-residents or corporations
• Foreign Companies holding a Global Business Licence under the FSA, will continue
to be considered as foreign source income until 30 June 2021.
To register a foreign company, it will also be mandatory to
provide a list of its shareholders, including the name of any In addition, the existing exemption from income tax which
beneficial owner. Whenever there is a change in the share GBL2 companies enjoy will continue to apply until 30 June
register and the name of the beneficial owner, a foreign 2021 to any such companies issued with a GBL2 under the
company will be required to file particulars of the change or FSA on or before 16 October 2017. However, such continued
alteration with the Registrar of Companies. benefit will not apply if:
C. Changes to taxation regimes • The company has acquired intellectual property assets
acquired from a related party after 16 October 2017.
Abolition of DFTC and introduction of an exemption regime • The company has acquired intellectual property assets
- The taxation of companies operating in the global business acquired from an unrelated party, or any newly created
sector has been reviewed. It was announced in the budget intellectual property assets, after 30 June 2018.
speech by the Minister of Finance and Economic Development • Income is derived from such specific assets acquired or
that the Deemed Foreign Tax Credit (“DFTC”) regime projects started after 31 December 2018.
available to entities holding a Category 1 Global Business
Licence will be abolished as from 1 January 2019. Instead, a Loss carried forward - The ITA has been amended to provide
“partial exemption” regime will be introduced. The intended that any loss incurred by a person, as listed below, during the
changes shall take effect upon regulations being made by the period of exemption, and who qualifies for an exemption or
Minister. tax holiday, will be able to carry forward any loss incurred
for set-off against income derived in the 5 succeeding income
An 80% exemption in respect of the following income, years:
provided that the substance requirement criteria are met, is
now applicable: • Income derived by a person licensed under the Captive
Insurance Act 2015 during a period not exceeding 10 years
• Foreign source dividend provided that such dividend is not from the coming into operation of the Act or such other
allowed as a tax deductible item in the source country. period as may be prescribed.
• Foreign source interest income. • The income of a corporation issued with a Global
• Profit attributable to a permanent establishment which a Headquarters Administration License on or after 1
resident company has in a foreign country. September 2016 during a period not exceeding 8 years
• Income derived by a Collective Investment Scheme, Closed from the income year in which the corporation was
end fund, CIS manager, CIS administrator, investment granted its licence.
adviser or assets manager licensed or approved by the FSC. • The income of a corporation issued with a Global Treasury
• Income derived by companies engaged in ship and aircraft Activities Licence, a Global Legal Advisory Services Licence,
leasing. an Investment Banking Licence, an Overseas Family Office
(Single) Licence, an Overseas Family Office (Multiple)
Licence on or after 01 September 2016 during a period
not exceeding 5 years from the income year in which the
corporation was granted its licence.
4 BLC ROBERT | A XIS FINANCE AC T PUBLIC ATIONTaxation of Banks - The Segment A and Segment B regime includes the natural person who exercises ultimate effective
will be abolished effective as from the year of assessment control over the applicant.
commencing 1 July 2020.
Private banking - A private bank which has been granted a
Banks deriving income from banking transactions with non- banking licence to carry on exclusively private banking may
residents and companies holding a GBL will still be considered be exempted from certain provisions of the Banking Act. In
as foreign source income up to the year of assessment addition, a private bank may be authorised to hold, store or
commencing 1 July 2019. sell gold, silver, platinum and other precious metals, as part of
the management of its client’s investment portfolio. A private
Further, effective from the year of assessment commencing 1 bank may also be authorised to provide safety vault services
July 2020, the following tax rates will be applicable to banks: to its clients.
a) 5 per cent - for the first 1.5 billion rupees of its Confidentiality obligation - The provision related to
chargeable income; and confidentiality has been made more stringent. New criminal
b) 15 per cent - for the remainder. offences have been created. For example, any person to
whom any information pertaining to a customer or financial
However, a bank which has a chargeable income exceeding institution (“confidential information”) is disclosed and who
1.5 billion rupees in an income year and knows or has reasonable grounds to believe, at the time of
the disclosure, that the information was disclosed to him in
- its chargeable income of the base year exceeds 1.5 contravention of the confidentiality obligation imposed under
billion rupees; section 64 of the Banking Act, commits an offence. Other
- its chargeable income of the current year exceeds that offences relate to (i) being in possession of such confidential
of its base year; and information with no justifiable ground or (ii) publishing such
- it satisfies certain prescribed conditions, confidential information without the consent of the customer
or financial institution or in contravention of section 64 of the
will be taxed at the following preferential tax rates: Banking Act.
a) 5 per cent - for the first 1.5 billion rupees of the Of utmost relevance to companies in the global business
chargeable income; sector, is the possibility for a financial institution to
b) 15 per cent - in respect of the chargeable income disclose confidential information to a domestic or foreign
exceeding 1.5 billion rupees up to the amount supervisory authority where the information is required by
equivalent to the chargeable income of the base year; the supervisory authority for the sole purpose of carrying out
and its supervisory functions in relation to money laundering or
c) 5 per cent - for the remainder. terrorism financing.
However, a bank which has a chargeable income exceeding Combatting money laundering and terrorism financing
1.5 billion rupees and: - A new Part VIIIA has been added to the Banking Act to
strengthen the country’s efforts to prevent money laundering
- its chargeable income of the base year does not exceed and terrorism financing.
1.5 billion rupees;
- its chargeable income exceeds that of its base year; and Financial institutions are now expected to implement anti-
- it satisfies certain prescribed conditions money laundering and anti-terrorism financing programs
(including appointing compliance officers, conducting
will be taxed at 5 per cent. screening procedures, ongoing trainings and audits). Such
obligations will extend to branches and group members and
It is to be noted that a bank which is taxed on its chargeable the financial institution shall be expected to share information
income at the rate of 5%, will not be entitled to tax credits on at group level for compliance purposes.
its foreign source income.
For the purposes of customer due diligence, the central bank is
D. Changes to the banking and finance legal regime empowered to issue such guidelines, directives or instructions
to any financial institution, a class of financial institutions or a
Licensing - The scope of information to be submitted in holder of a licence, as the central bank considers necessary for
connection with application for a banking licence has been the prevention of money laundering or terrorism financing. A
expanded to include information in relation to beneficial financial institution or holder of a licence which or who fails
owners. A beneficial owner (a) means the natural person to comply with a guideline, directive or instruction issued by
who ultimately owns or controls the applicant or the natural the central bank, commits a criminal offence.
person on whose behalf the application is made, and (b)
5 BLC ROBERT | A XIS FINANCE AC T PUBLIC ATIONAnother significant amendment to the Banking Act In the area of prevention of terrorism, the support for act
concerns the power conferred on the Central Bank to make of terrorism is extended to cover suspected international
regulations, issue guidelines, directives or instructions to a terrorists.
financial institution, class of financial institutions or holder of
a licence, as the Central Bank considers necessary to discharge AML/CFT Risk assessment - A reporting person, e.g., a bank,
the obligations of Mauritius pursuant to any decision of the financial institution, cash dealer or member of a relevant
United Nations Security Council. profession or occupation, must identify, assess and monitor
his money laundering and terrorism financing risks. The risk
Auditing of financial institution - The Central Bank has now assessment must take into account all relevant risks factors,
the discretion of revoking the appointment of the auditors of including but not limited to (i) nature, scale and complexity of
a financial institution. The regulator may also now audit the the reporting person’s activities, (ii) the products and services
affairs of a financial institution. provided by the reporting person, (iii) reliance on third parties
for elements of the customer due diligence process, and (iv)
Banking services and technology - Financial institutions and the outcome of any risk assessment carried out at a national
every holder of a licence has now a new statutory duty in level and any guidance issued.
relation to the development of new products and new
business practices and the use of developing technologies. A reporting person must document the risk assessments in
They must (a) undertake risk assessments prior to the launch writing, keep it up to date, and on request, make it available
of such products, business practices, and technologies (b) to the relevant competent authority without delay.
identify money laundering and terrorism risks inherent to
same and (c) take appropriate measures to mitigate such risks. At a national level, the Ministry to whom the subject of money
laundering is assigned, must coordinate and undertake
E. AML/CFT Compliance measures to identify, assess and understand the national
money laundering and terrorism financing risks through the
Disclosure of information under the Prevention of Corruption conduct of risks assessments. Such risks assessments must be
Act (“POCA”) - POCA has been amended to allow the Director- done at least every 3 years.
General of the Independent Commission Against Corruption
(“ICAC”) to disclose information to investigatory authorities Every supervisory and investigatory authority must use the
such as the Commissioner of Police and the MRA, or to findings of the risks assessments to enable them to allocate
supervisory authorities such as the Bank of Mauritius and the their resources efficiently to combat money laundering
FSC, if such disclosure is necessary in the public interest. and terrorism financing. The supervisory and investigatory
authorities must ensure that appropriate measures are
The Director General may now impart to an agency in implemented in relevant sectors to mitigate the risks of
Mauritius or abroad, such information, other than the source money laundering and terrorism financing.
of the information, as may appear to him to be necessary to
assist the investigation in respect of an offence committed in AML/CFT policies, controls and procedures - A reporting
Mauritius or abroad under POCA and the Financial Intelligence person must now establish policies, controls and procedures to
and Anti-Money Laundering Act (“FIAMLA”). mitigate and manage effectively the risks of money laundering
and terrorism financing identified in a risk assessment. Such
The functions of the ICAC have also been extended to co- policies, controls and procedures must be regularly updated,
operate and collaborate with not only international but also and the reporting person must also maintain a written record
national institutions, agencies or organisations in the fight of them, including any changes brought to them.
against money laundering and corruption.
Customer due diligence (“CDD”) - CDD requirements vary
Under the newly introduced sections 14A and 14B, cash according to the risk assessment carried out by the reporting
transactions and electronic transfers of money to or from person and as may be prescribed or specified by a supervisory
Mauritius should now be reported to the FIU within the authority. CDD should also be applied to existing customers
prescribed time or period respectively with the prescribed and beneficial owners with which it had a business relationship
particulars of transactions in excess of the prescribed amount. on the commencement of this new obligation. Whilst the Act
In section 17G, currency transactions in an amount equal to or did not previously define a ‘beneficial owner’, this has now
above the prescribed amount, whether conducted as a single been done. A ‘beneficial owner’ is a natural person who (i)
transaction or several transactions that appear to be linked ultimately owns or controls a customer; and (ii) on whose
should also be reported within the prescribed time limit in the behalf a transaction is being conducted and includes a natural
prescribed manner. person who exercise ultimate control over a legal person or
arrangement or such other person as may be prescribed.
The CDD requirements shall be applied at appropriate times
and on the basis of materiality and risk. Reliance upon third
6 BLC ROBERT | A XIS FINANCE AC T PUBLIC ATIONparties to carry out CDD does not reduce the responsibility of to deduct from its gross income an amount equal to 200
the reporting person. per cent of the emoluments payable to the homeworker.
However, the deduction will only be applicable if:
Record keeping - A reporting person must maintain its
records and books pertaining to customers and transactions a) the employer has the necessary information
which must include the following information (i) information technology permitting the homeworker to work
relating to the identity of customers and beneficial owners, remotely;
and results of any analysis conducted under FIAMLA, (ii) b) the employer has, at any time, more than 5 individuals
records on transactions, both domestic and international, working remotely in a calendar year;
sufficient to allow the reconstruction of each individual c) that such individual’s monthly emoluments (excluding
transaction for both account holders and non-account end of year bonus) payable to the homeworker do not
holders, and (iii) copies of all suspicious transactions reports, exceed 100 000 rupees; and
including any accompanying documentation. d) the Director-General of the MRA is satisfied that the
All such information must be kept for a period of at least individual began working from home on or after 1 July
7 years after the business relationship has ended, after the 2018.
completion of the transaction or from the date the report was
made, as applicable. The deduction shall be allowed in respect of emoluments
payable to a homeworker during a period not exceeding 24
Part II - Other legislative amendments consecutive months starting from 1 July 2018. In addition,
an employer who has incurred capital expenditure on the
In this Part, we address other legislative reforms which information technology system to employ homeworkers
stakeholders in the global business sector may find useful. during the year 1 July 2018 to 30 June 2020 will be allowed
in the year of acquisition and in each of 2 subsequent income
Homeworker - The Employment Rights Act (the “ERA”) is years, a tax credit of an annual amount equal to 5% of the
amended to cater for an employee working from home cost of the information technology system.
(“homeworker”). A ‘homeworker’ is defined as a person
who is above 18 years and who will carry out work at his or Maternity leave - A female employee who reckons less than 12
her residential premises or such other place which would months’ continuous employment shall now be able to obtain
have been agreed with the employer that is not a business maternity leave with pay. Prior to the amendments, any
premises. A homeworker excludes an individual who is self- maternity for employees who reckoned less than 12 month’s
employed and a person who owns or operates his or her own continuous employment was without pay. A full time female
business. employee will henceforth be entitled to fourteen (14) weeks
of maternity leave with pay as long as she is in employment.
An employment relationship is created with a homeworker
where: Payment of additional 5% to make representations before
the ARC - A person who is dissatisfied with the decision of
a) work is performed under the employer’s control, the Director-General of the MRA at objection level must, in
direction or authority; relation to an assessment under the ITA, Value Added Tax Act
b) remuneration is paid for work performed; and (“VAT Act”) or the Gambling Regulatory Act, in addition to
c) a homeworker is not engaged in a work on his/her the payment of the existing 10% of the assessment amount,
own account. pay an additional 5% before representations can be made
before the Assessment Review Committee (the “ARC”).
The degree of control varies and depends on the nature and However, the representations may be heard in the absence of
organisation of the work. However the homeworker cannot the additional 5% if the Chairperson is satisfied that failure to
engage another homeworker to perform the work allocated pay that amount is due to a reasonable cause.
by his/her employer.
Collection and recovery of tax - The MRA Act has been
It is to be noted that a homeworker will benefit from the amended to provide for collection and recovery of taxes in
provisions relating to termination of agreement, reduction respect of any tax that is due to the MRA. Previously each
of work force and closing down of enterprise, admission to specific legislation (i.e. the VAT Act and the ITA) provided for
the workfare programme, compensation and the protection the recovery of taxes but with the amendments made to the
against violence at work as laid out in under the ERA. MRA Act, the recovery of any taxes due (i.e. recovery of tax
arrears from emoluments, recovery of tax by attachment,
Tax incentives for employing a homeworker - An employer recovery of tax by distress and sale; contrainte; proceedings
employing a homeworker will benefit from tax incentives. If for temporary closure of business premises and inscribed or
during the period 1st July 2018 to 30th June 2020, a person uninscribed privilege) shall be governed by the MRA Act.
employs a full time homeworker, that person shall be allowed
7 BLC ROBERT | A XIS FINANCE AC T PUBLIC ATIONDeferred payment of VAT at importation - The Director- international buying and selling of tradeable commodities)
General may defer payment of VAT at importation on capital are no longer permitted activities in the Freeport.
goods, being plant and machinery, imported by a VAT
registered person. The VAT registered person must include The maintenance of heavy-duty equipment is made a
such deferred VAT as output tax in his return on submission permissible activity in the Freeport.
of his return for the taxable period in which VAT is deferred.
However, where VAT deferred at importation is not declared Immigration - The activities for which a person who is a non-
as output tax in the taxable period in which the VAT is citizen may be granted the status of permanent resident
deferred, the deferred VAT shall become due and payable in Mauritius by investing at least USD 500,000 have been
and it shall be recovered under the Customs Act. extended to include the following: Initial Public Offering,
Artificial Intelligence, Biotechnology, Fintech and Robotics.
Refund of VAT upon cancellation of registration - On However, ‘insurance’ has been removed from the list of
cancellation of registration, the registered person shall pay qualifying activities.
any tax due including tax on any capital goods exceeding
100,000 rupees forming part of the assets of the business Applications for a work permit in respect of any activity in
(other than tax on motor cars/ motor vehicles of less than 9 the Freeport, Integrated Resort Scheme or under the Film
persons used for own consumption). Rebate Scheme must be made to the CEO of the Economic
Development Board.
Additional VAT assessment - The Director-General of the MRA
may make an additional assessment where it is found that tax Corporate affairs - In order to coerce compliance with the
has been under claimed or the excess to be carried forward provisions of section 91(3) of the Companies Act which
has been overstated. imposes an obligation to maintain a share register stating,
with respect to each class of shares the names, in alphabetical
Enforcement powers of the Director - General - The provisions order, and the last known address of each person who is, or
relating to the recovery of unpaid taxes under the VAT Act has within the last 7 years been, a shareholder, it is now a
and ITA have been repealed from the VAT Act and ITA and are criminal offence for a company, other than a small private
now addressed in the MRA Act. company, which fails to comply with the obligation to keep
a share register.
Banks to pay a special levy - Every bank with accounting
period ending on or after 1 January 2019 shall be liable to A director who fails to make an entry in the interest register
pay a special levy on its leviable income derived in every where there is one and make certain disclosures after becoming
accounting period at the rate of: aware of the fact that he is interested in a transaction or
proposed transaction with the company, commits an offence
a) 5.5% in the case of a bank having a leviable income of and is liable to imprisonment and the payment of fine.
not more than 1.2 billion rupees; and
b) 4 % in the case of a bank having a leviable income of As regards company records, there is now an obligation on
more than 1.2 billion rupees. directors, at all times and even where the company is removed
from the register, to ensure that the company records are kept
The term “leviable income” means the sum of net interest for a period of at least 7 years from the date of completion of
income and other income from banking transactions with the transaction, act or operation to which it relates.
residents, before deduction of expenses.
With respect to restoration of companies to register, the
The special levy must be remitted to the Director-General new amendments to the Companies Act provides that
within 5 months from the end of the accounting period. where the Registrar restores a company to the register on
However, no levy shall be paid for an accounting period his own motion, the requirements for public notice in 2 daily
where a bank has incurred a loss. A penalty of 5% interest newspapers no longer applies. Notice of the restoration is
and an interest of 0.5% per month or part of the month is given by the Registrar stating that the company has been
applicable for late payment of special levy. restored to the register.
Removal of restriction in the Freeport sector - The main
change is the removal of the restriction for any Freeport
activity to be carried out exclusively for the re-export and
export of goods brought in the Freeport for warehousing,
storage and minor processing. An enterprise operating in the
Freeport may also supply goods locally in Mauritius subject
to the applicable import custom formalities. However, freight
forwarding services, manufacturing and global trading (i.e.
8 BLC ROBERT | A XIS FINANCE AC T PUBLIC ATIONThis publication does not cover all amendments to the laws made by the Finance (Miscellaneous Provisions) Act 2018. It is not designed to provide legal or other advice. If you would like to know more about this publication or any other aspect not covered by it, contact the team below. If you do not wish to receive further information from us about events or legal developments which we believe may be of interest to you, or you would like to be added on our mailing list, please either send an email to blc@intnet.mu or info@axis.mu, or contact us by post. Axis Fiduciary Ltd BLC Robert Assad Abdullatiff, Managing Director Ammar Oozeer, Barrister E:Assad.Abdullatiff@axis.mu E: Ammar.Oozeer@blc.mu Sayyad Khayrattee, Fayaz Hajee Abdoula, Head of Business Development Barrister & Senior Associate E:Sayyad.Khayrattee@axis.mu E: Fayaz.Abdoula@blc.mu Axis Fiduciary Ltd BLC Robert 2nd Floor, The Axis, 2nd Floor, The Axis, 26 Bank Street, 26 Bank Street, Cybercity, Cybercity, Ebene 72201, Ebene 72201, Mauritius Mauritius T: (230) 403 2500 T: (230) 403 2400 F: (230) 403 2501 F: (230) 403 2401 9 BLC ROBERT | A XIS FINANCE AC T PUBLIC ATION
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