darshan roopun - home - temple group · 2020. 9. 8. · 2020, temple group ltd, all rights reserved...

Darshan Roopun

2020, TEMPLE GROUP LTD, All Rights Reserved

Development in the legal landscape


Alignment with International

Best Practices



• Additional protection to Shareholders

• Registration of Ultimate Beneficial Owners at incorporation stage

• Enhancing efficiency and transparency when contracting with the Government

• Establishing and publication of Service Level Agreements for investors and businesses

• Proper contract management and timely settlement of commercial disputes


Employment law


• Uniformisation of the definition of ‘earnings’

• Implementation of a protocol on Heavy Rainfall for the Private Sector concerning remuneration

• Enhancing protection against discrimination at work

• Avoiding double payment in respect of the Portable Retirement Gratuity Fund where severance allowance is paid


• Protection against abusive termination

• End-of-year bonus of employees earning more than Rs100,000 monthly covered under the End of Year Gratuity Act

• Ratification and implementation of the International Labour Office Convention

• Providing a better income security to laid off workers by increasing the amount of Transition Unemployment Benefit

Vandana Boolell


Personal Tax


• Changes to the income exemption thresholds• Deduction for dependent • Special Allowance

Category From

Rs

To

Rs

Increase

RsA. Individuals with no dependent 310,000 325,000 15,000

B. Individuals with one dependent 420,000 435,000 15,000

C. Individuals with two dependents 500,000 515,000 15,000D. Individuals with three dependents 550,000 600,000 50,000

E. Individuals with four or more dependents 600,000 680,000 80,000

Retired/ Disabled person with no dependent 360,000 375,000 15,000

Retired/ Disabled person with dependents 470,000 485,000 15,000


Effective Tax : Individual 2019/2020 2020/2021Pre-Budget Post-Budget

Income Tax (15%)Salaries 6,500,000.00 6,500,000.00

Dividend from resident company 2,000,000.00 2,000,000.00

Total Income 8,500,000.00 8,500,000.00Less exempt divident income - 2,000,000.00 - 2,000,000.00

Total Net Income 6,500,000.00 6,500,000.00Income Exemption Threshold (3 Dependents) - 550,000.00 - 600,000.00

COVID 19 Fund Contribution - -

Chargeable Income 5,950,000.00 5,900,000.00Tax Liability at 15% 892,500.00 885,000.00

Solidarity Levy (5% & 25%)Chargeable Income 5,950,000.00 5,900,000.00

Dividend ncome 2,000,000.00 2,000,000.00

Levy on solidarity (5% & 25%) - 3,500,000.00 - 3,000,000.00

Solidarity levy exemptionSolidarity taxable income 4,450,000.00 4,900,000.00Levy on solidarity (5% & 25%) 225,500.00 1,225,000.00

Total tax payable 1,115,000.00 2,110,000.00

Effective tax rate on taxable income 17% 32%

Effective tax rate on total income 13.12% 24.82%


2019/2020 2020/2021Pre-Budget Post-Budget

Income Tax (15%)Salaries 6,500,000.00 6,500,000.00

Dividend from resident company 2,000,000.00 2,000,000.00

Total Income 8,500,000.00 8,500,000.00Less exempt divident income - 2,000,000.00 - 2,000,000.00

Total Net Income 6,500,000.00 6,500,000.00Income Exemption Threshold (3 Dependents) - 550,000.00 - 600,000.00

COVID 19 Fund Contribution - -

Chargeable Income 5,950,000.00 5,900,000.00Tax Liability at 15% 892,500.00 885,000.00

Solidarity Levy (5% & 25%)Chargeable Income 5,950,000.00 5,900,000.00

Dividend ncome 2,000,000.00 2,000,000.00

Levy on solidarity (5% & 25%) - 3,500,000.00 - 3,000,000.00

Solidarity levy exemptionSolidarity taxable income 4,450,000.00 4,900,000.00Levy on solidarity (5% & 25%) 225,500.00 1,225,000.00

Total tax payable 1,115,000.00 2,110,000.00

Effective tax rate on taxable income 17% 32%

Effective tax rate on total income 13.12% 24.82%


Corporate Tax


Levy On Corporates

• A company, having gross income exceeding Rs 500 million in an accounting year or if it forms part of a group of companies where the gross income of the group exceeds Rs 500 million, will be subject to a levy on its annual gross income at the rate of – (i) 0.3% for insurance companies, financial institutions, service providers and property holding companies; and (ii) 0.1% for other companies.

• The levy will not apply to a company which operates in the tourism sector or which holds a Global Business License.

• Commercial Viability


2020, TEMPLE GROUP LTD, All Rights Reserved 2020, TEMPLE GROUP LTD, All Rights Reserved

Solidarity Levy

• As from the income year 2020-2021, the levy will be applied on the chargeable income plus dividends in excess of Rs 3 million of a Mauritian citizen at the rate of 25%.

• Lump sum income received by a person is excluded from the computation of the Solidarity Levy

• The Pay As You Earn (PAYE) system will apply to the Solidarity Levy

• Solidarity Levy on Telephony Service Providers

• Alternative Minimum Tax on companies carrying on life insurance business


Pensions


• Introduction of contributory, participative and collective system, the Contribution Sociale Généralisée (CSG).

• Exempting a Non-Citizen employed by a Non-Citizen Contractor from payment of contributions to the National Savings Fund

• Amendments to the Private Pensions Scheme Act

• Amendments to the Civil Service Family Protection Scheme Act – pensions and contributions for members for of the National Assembly

• Amendments to the Pensions Act and and related bodies


Tourism & Real Estate


Tourism

• Apart Hotel Scheme • Invest Hotel Scheme • State land rental exempt for 2020• For Hotels under renovation : exemption of land rent for 2 years• Opening of Borders


SMEs and Regional Investment


Africa and the region• Mauritius Investment Corporation (MIC) to invest 10 Billion MUR ,

including in Govt to Govt commissioned special economic zones (SEZs).

SMEs• DBM to support SMEs with 10 Billion MUR in soft gearing, providing

loans of up to 10 M @0.5% interest rate.• Taxi Operators loan from DBM as well will also be available.


Our Overview

The tax regime is seeing some important overhauls which are designed to bring greater equality in the overall distribution of wealth as well as create longer term sustainability for government revenue. This is also the underlying objective of the pensions review.

A large number of individuals and business owners will want to take an in-depth look at how the personal and corporate taxes impact on their fiscal and medium-term planning.

Measures have been taken to support SMEs and local investment while making parallel moves to reinforce our presence in the region.

Aditi Boolell


IMMIGRATION



THREE MAJOR LIMBS

Inviting Investors5 Measures

Ease of Process1 Measure

Family-Friendly7 Measures


• Ease of Process: . EDB to be sole responsible processing agency for OP’s

. Combination of Work Permit and Residence Permit into a single permit


Permits

Residence Permits

Occupation Permit

Where RP obtained through acquisition of property no requirement to apply for a Work Permit/ OP to work/

invest in MRU.

Allowed to bring parents as dependents

Spouse of permit holder exempt of requirement to

apply for a Work Permit/ OP to work/ invest in MRU

Minimum basic monthly salary requirement of 30k

extended beyond ICT sector

• A More Family-Friendly Regime


Permits

Permanent Residence Permits

(“PRP”)

Occupation & Residence Permit

Validity extended to 20 years

Permit Holders able to apply for a PRP after 3 consecutive

years on their permit

Validity extended to 10 years

• A More Family-Friendly Regime


Minimum USD 100k capital investment halved to USD 50K for those applying for an OP as investor

Minimum investment to acquire property in Mauritius under an approved scheme is USD 375k as opposed to USD 500k

First-time applicants seeking a PRP require a minimum capital investment of USD 375k as opposed to USD 500k

Removal of turnover and investment requirements for OP application as Innovative Investors

Ability for Permit Holders to invest in other venture with no shareholdings restrictions

• Opening up to investors

• New Property Scheme for Non-Citizens

. Smart City Scheme . Available to Non-Citizens holding an OP . Acquire upto 2100 sq. metre of land for residential purposes . Only available for period of 2 years (30 June 2022) . Limited to 25% of land area planned for construction of residential properties



OUR OVERVIEW • The proposed changes are in line with the Government’s decision to re-align the

local immigration regime to international standards

• Much more family-friendly environment with the extension of the length of permits and category of dependents. Whilst it allows family to plan, with some additional degree of certainty for the long-term, it also commits them to work and/or invest in Mauritius for a longer time.

• Quality v/s Quantity of investment? Lowering capital investment thresholds certainly invites more entrepreneurs and investors to consider Mauritius as their destination of choice. However, this shouldn’t be construed as Mauritius compromising on the quality of investments it seeks to bring to the country. Investors are still very much recommended to complete a thorough market research and propose a business plan which will justify how they intend to add value to our local economy.



PHARMACEUTICAL INDUSTRY

Investing in the Pharmaceutical Industry

• Investment in production of pharmaceutical products, medical devices and personal protective equipment through a public-private enterprise by the Mauritius Investment Corporation Ltd.

Fiscal Measures

• Waiver of registration duty on acquisition of immoveable property in life sciences sector

• VAT Exemption granted to medical R&D centres on construction materials and specialized equipment

• Double VAT Deduction on R&D expenditures


OUR OVERVIEW

• Mauritius Investment Corporation (MIC) initiative to take equity participation in the private sector, should help those in financial distress.

• In line with the bio-engineering facilitation from previous budgets and coupled with the important 8-year tax holiday for global top 500 companies setting up operations in Mauritius, it is hoped to catch the eye of pharmaceutical leaders for R&D as well as generic production of medical products.



MANUFACTURING& FREEPORT

• Fostering a ‘Buy Mauritian’ Program

. Fostering of a ‘Buy Mauritian’ program . Minimum shelf space of 10% for locally manufactured goods in supermarkets . Margin of Preference of . 20% on public purchases to all local manufacturing companies; and . 30% for manufacturing SME’s

. Investment tax credit of 15% over 3 years extended to all manufacturing companies . Double deduction on cost of acquisition of patents and franchises & cost incurred to comply with international quality standards and norms

• No proposed measures for the Freeport


OUR OVERVIEW

• In line with the ‘Made in Moris’ campaign

• These measures are very welcome, and some additional levy on import of items competing directly with local produce could’ve also helped.

• Temporary authorisation for freeport companies to increase their local turnover thresholds until borders re-open as a measure to safeguard employment and ensure continuation of operations to a greater extent.



ICT

Cote d’Or Data Technology Park

• “12 highly skilled and specialized centres from additive manufacturing to deep artificial intelligence”

• “Deep Artificial Intelligence Centre will provide the necessary support for start-ups, existing businesses and government services to achieve a major digital transformation”

Technology and Innovation Fund

• Projects recommended by the MRIC• Up to MUR 2Mil as equity


OUR OVERVIEW • This is a good initiative, combining local and international innovation, as well

as making optimum utilization of the state infrastructure at Cote D’Or.

• The MRIC fund also creates an additional incentive for local companies to focus and develop their ICT tools

• The MIC’s funding mechanism – i.e. through equity provides relief to companies in a way that local banks are not able to do so. With a put-option being proposed, there is no ongoing interest to be considered, thus reducing cash flow stress and creating more incentive for SME’s to apply for funding.



QUESTION TIME

Questions and Answers

• For expatriates who have work or residence permits that have expired during lockdown or later. Have the permits been renewed automatically or should the permit holder apply for renewal? Under the Covid-19 Act, for permits having expired during the lockdown, there is a 30-day extension granted post the lockdown period (ended 30 May 2020) as regards the validity of the permit. Renewals should be initiated within that period. Similarly, for permits expiring within 21 days post the lockdown period, there is a 30-day extension on its validity applicable as from the date of its expiry. Renewal applications should be initiated within that period.

• Will people who currently hold an Occupation Permits (OP) valid for 3 Years automatically have their permits extended to an OP valid for 10 years? Until the budget measures is duly enacted, we cannot confirm whether the law will be retroactive or not. Our belief is that it the current OP’s will retain their 3-year validity and new OP’s, post the enactment of the law will have this 10-year validity applicable to them.

• Are yearly targets/requirements removed for an OP? No mention of same has been made under the budget measures so far and those will most probably remain on the OP. We expect to see the yearly targets be varied to remain in line with the extension of the validity period of the OP.

Questions and Answers• Are there different types of permanent resident permits? I presume their spouses are also

allowed to work without having to obtain work permits or OP? There are different categories of Permanent Residence Permits (“PRP”) which exist as a continuation of the four main limbs of the OP/RP Routes – being ‘Professional’ , ‘Self-Employed, ‘Investor’ and ‘Retired Non-Citizen’ – those are applied for at the term of the OP subject to having satisfied the eligibility criteria. A fifth route to obtaining the PRP also exists which is through an initial investment of USD 500K (to be brought down to USD 375K under the new budget measures). The budget measures alludes to OP Holders but it is believed that, since the PRP is a continuation of an OP, the proposed exemption on spouses as regards the requirement of a work permit/OP will also apply to them. This will be confirmed once the budget measures are enacted and the relevant authorities issue their updated guidelines.

• How to calculate the PAYE when we are not aware of how much dividends will be distributed during the year? The PAYE (Pay as you Earn) system is a system whereby employers are required to withhold tax from the salaries of employees chargeable to tax at the time the salaries are disbursed to or made available to the employees. The tax withheld is then remitted to the Mauritius Revenue Authority (MRA) every month. Dividends are not subject to taxes in Mauritius. There is a Solidarity Levy applicable the sum to total of chargeable income and dividends if they together exceed a certain threshold. Per the new announcements under the 2020-2021 Budget this threshold is MUR 3million. The filing of this to the MRA will be done by the recipient taxpayer in their annual tax filings, and not by the company declaring dividends.

• Hasn’t the Solidarity Levy of 25% been amended to include foreign residents and not only Mauritian Citizens? Indeed, in clarifications made by the Minister of Finance, Dr Renganaden Padayachy, after the Budget reading, it was stated that the Solidarity Levy will apply to Mauritian residents including foreigners.

Questions and Answers

• Does the WRAs already provide for the protection order as mentioned by the Minister during his speech? Yes, the Section 35 of the WRA provides for protective orders. the supervising officer may, where he thinks fit, apply to the Judge in Chambers for a protective order, on behalf of the worker or group of workers in the amount of the remuneration due against an employer and any bank or other financial institution holding funds on behalf of the employer. An application for protective order may be made, where, after making an enquiry, the supervising officer is satisfied that an employer has failed to (a) pay any remuneration due to a worker or a group of workers and (b) comply with a notice of compliance. The intention of the legislator is to extend this protection to the ruling of the Redundancy Board to better protect the rights of workers against abusive termination.

• Are Service Level Agreements beneficial only to the Government or public bodies? Service Level Agreements (SLAs) are beneficial to the parties as the ultimate goal of an SLA is to help the parties involved to identify and correct service level issues quickly and efficiently, so as to mitigate their impact on operations.

Thank You!

Tel: (230) 212 9810Email: [email protected]

Contact: Urmila Boolell S.C.


Contact: Esmarie Swanepoel


Contact: Aditi Boolell


Contact: Vandana Boolell


Contact: Vandana Boolell


Contact: Aditi BoolellTel: (230) 212 9810Email: [email protected]

Contact: Sien Sien Yip Tong

TEMPLE COURT2, Labourdonnais Street

11413 Port Louis, Mauritius

darshan roopun - home - temple group · 2020. 9. 8. · 2020, temple group ltd, all rights reserved...

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