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Additional Stimulus Package - December 2008
The "additional Stimulus Package: shoring up economic performance" includes tax concessions in respect of the following:
(b) Environment Protection Fee (EPF)
(e) Construction Projects (Download Registration Form)
Liability to the Solidarity Levy is being suspended in respect of the taxable period from 1 January 2009 to 30 June 2010, i.e up to the date the levy ceases. Any liability in respect of the period prior to 1 January 2009 shall remain payable.
(b) Environment Protection Fee (EPF)
(i) Payment of the Environment Protection Fee by a hotel, a guest house and a tourist residence will not be on a monthly basis in respect of the period 1 January 2009 to 31 December 2010. Instead, the company/business will effect payment of the Fee within 4 months after the end of its accounting period, provided its profits before tax but after deduction of the Fee and the temporary solidarity levy exceeds 5% of its turnover for the accounting period. Any liability in respect of the period prior to 1 January 2009 shall remain payable.
(ii) Furthermore, decision has also been taken to exclude guest house and tourist residence having 4 bedrooms or less from the ambit of the tax as from the period starting on 1 January 2009.
Download EPF registration form / EPF voucher
Land transfer tax arising from transfer of property as from 1 January 2009 will be allowed as a deduction for income tax purposes where it is paid in the pursuance of a business or trade.
(d) Income Tax Exemption for Freeport Operators
The income tax exemption under the transitional
provisions granted to a private freeport developer or freeport operator
is extended by a further period of 2 years.
(e) Registration of developers and their construction projects
A. Exemption of Land Transfer Tax and Registration Duty
(i) The Additional Stimulus Package provides for the suspension of payment of Land Transfer Tax and Registration Duty on acquisition of freehold land for construction projects, provided that the project is registered with MRA on or before 31 December 2010.
(ii) Acquisition of freehold land during the period 1 January 2009 to 31 December 2010 for the purpose of erecting a building whether for own use, for renting or for sale will be exempted from Land Transfer Tax and Registration Duty provided the construction project has been registered with MRA and at least Rs 50 million of construction works are completed on or before 30 June 2011.
(iii) The exemption referred to in subparagraph (ii) will be granted only in respect of the land or that part of the land used for the construction project.
(iv) The exemption also covers transfers effected on or before 30 June 2011, of freehold land together with a building or part of a building thereon (including transfers by way of vente a terme and vente en l'état futur d'achèvement under the Code Civil Mauricien) provided construction of the building has started on or after 1 January 2009 and the total costs of construction of the buildings under the project exceed Rs 50 million by 30 June 2011.
(v) For the purposes of this measure, costs of construction will not include the costs of ancillary infrastructure works such as roads, walls, drains, landscaping and utility services.
(vi) If the condition of Rs 50 million is not met, the Registrar-General, on notification by MRA, will claw back both the exemption of land transfer tax and registration duty from the investor/developer.
(vii) Where land planned to be used for a construction project is not fully utilised, the exemption referred to in subparagraph (ii) relating to that part of the unutilized land will be clawed back by the Registrar-General.
(viii) A penalty representing 20% of the amount of any land transfer tax and registration duty clawed back will be imposed by the Registrar-General.
(ix) The above exemption will not apply to projects under the Integrated Resort Scheme and the Real Estate Scheme under the Investment Promotion (Real Estate Development Scheme) Regulations 2007.
B. Conditions applicable for registration of a construction project:
(a) the company is a company incorporated or registered under the Companies Act;
(b) the company submits at time of registration -
(i) a brief on its nature of business;
(ii) the site/location plan, extent and transcription volume number of the land;
(iii) the pre-sale agreement in respect of the land, if any;
(iv) a business plan including project components and description, total investment, estimated total costs of construction and implementation schedule indicating the estimated costs of works;
(v) the estimated number of jobs to be created during construction and thereafter; and
(vi) Outline Planning Permission (OPP) from the relevant local authority.
(c) Upon registration of a project with the Director-General of MRA, the Director-General shall issue to the company a certificate of registration in respect of that project.
(d) For the purposes of monitoring the costs of construction of the buildings under a project , the company shall be required to:
(i) notify the Director-General in writing the date on which the construction of the building has started; and
(ii) submit to the Director-General, not later than 15 days after the end of every 6 months a report from a quantity surveyor certifying the progress of works and the costs of construction works completed, the first report being submitted after construction of the building has started.
(e) If a company satisfies or fail to satisfy the condition relating to the completion of Rs 50 m of construction works on or before 30 June 2011, the Director-General shall give written notification to that effect to the Registrar-General.