Guidelines for Small and Medium Enterprises (SMEs) - Individual
SMEs and Taxation
As an SME, you play a vital role in the economic development of Mauritius.
In order to better focus on your business activities, it is important that you are aware right from the start of the incentives you are entitled to as well as the obligations you have to comply with under the revenue laws. Your obligations will differ depending on whether you are a self-employed or a corporate body.
SMEs who are self employed
Starting a Business
As soon as you start a business on your own account, you should be registered with the MRA and be compliant by keeping proper records and submitting the returns applicable to you under the relevant revenue legislation.
Compliance with revenue laws
To be tax compliant means:
- Keeping proper records
- Complying within due dates for submission of returns and payment of taxes (if any).
- Declaring the correct amount of income / revenue in your tax returns.
- Paying the correct amount of tax.
Benefits of being compliant are:
- Efficient and effective management of your business;
- Improved decision making where proper records are kept.
- Information is readily available to:
- file returns,
- apply for loans, and
- bid for tenders.
- Promote growth of your business and increase its goodwill
Keeping of records
Being a person in business, you have to keep records as follows:
- in computerised or manual form;
- in English or French language;
- in chronological order; and
- for a period of 5 years
Benefits of keeping proper records
Keeping copies of all receipts and invoices issued by you will help you to know:-
- items sold
- value of sales
- customers who have paid
- what amount is still owed by your customers
Recording all purchase invoices will help you to know:-
- from whom you have purchased
- value of purchases
- what payment has been made
- what amount you still owe to your supplier/s.
Recording all expenses made will help you to know:-
- what are the expenses relating to your business
- amount of expenses paid
- amount of expenses not paid.
- Fixed Asset Register
Keeping a fixed asset register including original invoices will help you to know:
- what assets have been purchased
- on which date you acquired the asset
- the amount paid
- annual allowance which you may claim as a deduction.
- Bank statements, cheque stubs, paying-in books, import bills, export bills and other documentary evidence will enable you to support the figures in the financial statements.
- Decision making
Information from the records will enable you to know:-
- your cash position;
- whether it is right to invest in new technologies, to upgrade production and to increase sales
- Income and Expenditure Statement
- It will report about the position of the business.
- Enable you to know whether the business is generating a profit or making a loss.
- Help you to apply for loans.
Obligations of a self employed
Obligations under the Income Tax Act
You are required to furnish the following returns and effect payment if any
- A quarterly CPS Statement when your gross income for preceding income year exceeds 4 million rupees and tax payable on chargeable income exceeds Rs 500.
Note as from income year 2019/20, if your turnover for the preceding year did not exceed 10 million rupees and you are eligible to elect for the presumptive tax system, you need not submit CPS statements.
- An Annual Return declaring income derived during the preceding year.
If you are an employer
You have to register as employer and submit the following:
- Monthly PAYE / NPF / NSF / Levy Returns ( If you have less than 10 employees , Mobile App developed by MRA can be downloaded from Google or App Store to submit the monthly return electronically )
- Return of Employees and
- Issue Statement of Emoluments to employees
Obligations under the VAT Act
You have to register for Vat if:
- your annual turnover of taxable supplies exceeds 6 million rupees or
- your business activities fall within the 10th Schedule to the VAT Act ( To link with relevant section of the VAT Act)
You have to submit
- monthly VAT Returns when your taxable supplies exceed 10 million rupees or
- quarterly VAT returns in other cases
Tax Exemptions under the Income Tax Act
You will be entitled to eight years tax holiday if you satisfy the following conditions:
- Small enterprise set up on or after 2 June 2015.
- Holder of an SME Development Scheme Certificate.
- iii. Qualifies under a scheme administered and managed by SME Mauritius.
Note: The 8 years tax holiday applies only to income derived from activities relating to a project as approved by SME Mauritius.
Presumptive Tax (starting as from year of assessment 2020/21)
If your gross income does not exceed 10 million rupees, you may be eligible to elect for the presumptive tax system and pay tax at the rate of 1% of your gross income. ( For more details click here)
Voluntary Disclosure Scheme to qualifying SMEs ( VD-SME)
A small and medium enterprise whose annual turnover for the year of assessment 2017/18 did not exceed 50 million rupees may come forward and regularise its tax affairs if it qualifies under the VD-SME.
VD-SME will be operational up to 29 November 2019 ( For more details click here)
Tax Arrears Settlement Scheme (TASS 2019)
A small and medium enterprise whose annual turnover for the year of assessment 2017/18 did not exceed 50 million rupees may benefit from 100% waiver of its accrued penalties and interests on tax arrears outstanding as at 10 June 2019 in respect of assessment issued and return submitted on or before 30 June 2018 under the Income Tax Act and Value Added Tax Act.
You will have to settle the tax on or before 31 March 2020 (For more details click here) .