Budget 2026/2027 Business Compliance Review

The TDS net has been widened to cover digital and software-related services:

• Software/Maintenance (1% TDS): Applies to payments exceeding MUR 300,000 for software-related services or remote maintenance of equipment.
• Digital Marketing (5% TDS): Applies to payments for advertising, endorsements, digital content, or marketing services provided via social media or other electronic platforms.

Our objective: Ensure your business has the right controls in place to identify, calculate, and report applicable TDS obligations.

• Time of supply: It has been clarified that the time of supply of a good or service will be deemed to occur three months after the goods are delivered or services performed, where neither an invoice has been issued nor a payment received.
• Input Tax Credit Window: The time limit for claiming input VAT credits has been reduced from 36 months to 24 months.
• Introduction of new fines and penalties in respect of VAT.

Our objective: Help your business maximise legitimate VAT recovery while maintaining proper compliance.

• Hardened CCR Levy: The Corporate Climate Responsibility (CCR) Levy can no longer be offset by foreign tax credits. It is now payable via the Advance Payment System (APS) on a phased quarterly basis (starting at 25% for FY 2026/2027, scaling to 100% by 2029/2030).
• Investment Tax Credit: The 15% credit for manufacturers has been extended until 30 June 2029.
• Allowable Deductions Abolished: Several specific tax deductions (e.g., 150% deductions for hotel renovations and double deductions for joint tertiary education contracts) have been abolished.
• Income Tax Holiday: The 10-year tax holiday available to captive insurance companies will be extended by an additional five years for captives licensed before 19 June 2026. Start-ups will benefit from a 10-year tax holiday.

Changes affecting the Corporate Climate Responsibility (CCR) Levy may have an impact on tax planning and cash flow management.

Profitable companies with unutilised foreign tax credit may still be liable to the 2% CCR Levy unless offsetting happens through treaty relief.

Our objective: Provide greater visibility over your future tax obligations.

Employment-related Budget measures require businesses to update internal policies and payroll processes.

• Maternity Leave: Significantly extended to one year (the first 6 months at full pay, the remaining 6 months at half-pay).
• Paternity Leave: Increased from 4 to 6 weeks.

Our objective: Help employers implement changes smoothly while maintaining accurate payroll records.

• New 35% Tax Band: The “Fair Share Contribution” has been replaced by a new 35% tax rate introduced for chargeable income above MUR 12m.
• Abolition of CSG & PRGF and revamping of NPF. As from 1 July 2027, the Contribution Sociale Généralisée (CSG) and the Portable Retirement Gratuity Fund (PRGF) will cease and be replaced by contributions to the new National Pensions Fund (NPF).
• Lump Sum Exemption: The tax-exempt threshold for lump sums received as pension, retiring allowance, or severance allowance has been increased from MUR 3 million to MUR 3.5 million.
• Golden Visa: Holders now benefit from tax incentives aligned with the Premium Visa regime, including taxation of foreign employment income only upon remittance to Mauritius.

Our objective: Assist Entrepreneurs and self-employed Professionals file their Individual Income Tax Return accurately to avoid any penalties.

Transparency requirements continue to evolve, making accurate corporate records essential.

• Beneficial Ownership: Compliance rules are being tightened; mandatory disclosure of dates of birth for beneficial owners is required by 30 June 2027. This obligation now extends to Sociétés.

Our objective: Help your business maintain complete and up-to-date compliance records.