Further to the budgetary speech on 10 June 2018, the Finance Miscellaneous Provisions Act 2019 (the Act) received the Acting President’s agreement on 25 July 2019.
The Act incorporates the various measures announced by the Minister of Finance. In this article and summary PDF we will cover the key amendments brought to the tax legislation and its impact on the Global Business Sector alongside our views.
Make sure you click here for a detailed summary of changes made to corporate tax, personal tax, tax administration and regulations.
What has changed
Key amendments brought by the Financial Act 2019 are:
- An extension of the 80% partial exemption regime which was initially introduced in 2018
- The introduction of CFC rules to consolidate our existing anti-avoidance provisions
- The introduction of a REIT regime to cover income from additional activities
- The introduction of tax holidays for companies engaged in certain activities like bunkering, operation of E-commerce or peer-to-peer lending platforms, or development of a marina.
A voluntary disclosure of income scheme has also been introduced to enable taxpayers having overseas assets to regularize their tax affairs and to benefit from tax amnesty provision, providing for a full waiver if penalties and interests.
These measures are aimed to add onto the continued improvements to our global standards and promoting Manutius’s repute as an International Financial Center. However, these amendments may alter planning that entities have entered into in the past and may well require some careful thought and planning going forward, while considering the regulatory and consequent tax positions
What this means
While the Act introduces new CFC rules, we are of the view that their impact is likely to be minimal: in most instances the tax rate will likely not be lower than the rate applicable in Mauritius, or one of the other exemptions would apply.
Also of interest is the various tax holidays now available. The tax exemption holiday for the creation of IP is interesting given the hostile view in other financial centers regarding IP. The relief available for aircraft operators is also likely to attract positive attention from operators.
All in all, we have a positive view of the changes made and encourage anybody with queries to get in touch with us to discuss them.