Transcript REVAMPING MRA’s IDENTITY

Finance Act 2015 Update
D.Ramdin
Director, Operational services, MRA
5 June 2015
Individual Income tax
Change in income year end from
31 Dec to 30 June
• S 2 - Year means a period of 12 months
commencing on 1July.
• The change does not affect companies which
will continue to submit their annual return 6
months after accounting year end.
• For individual income tax - transitional
measures provided in S 161A. The 6 months
period from1 Jan 2015 to 30 June 2015 shall
be the basis period for YOA 2015-16
Change in income year end
from 31 Dec to 30 June(cont)
• Employers to give Statement of Emoluments to
employees and file ROE to MRA by 15 August.
• Payers to give Statement of Income Received to
payees and file TDS return to MRA by 15 August.
• Individuals should file annual return by 30 September
and if electronically by 15 October
• Société and succession to prepare accounts to 30
June. Six months accounts to period ended 30.6.15.
• Every société deriving business income should file
return to MRA by 30 Sept and give Statement of share
of income to associate.
Personal reliefs and deductions
Asst Year
2015
2015-2016
2016-2017
1.1.14 -31.12.14
1.1.15 – 30.6.15
1.7.15 – 30.6.16
12 months
6 months
12 months
Cat A – no dependent
275,000
137,500
285,000
Cat B – one dependent
385,000
192,500
395,000
Cat C – two dependents
445,000
222,500
455,000
Cat D – 3 dependents
485,000
242,500
495,000
Cat E – Retired/disabled
no dependent
325,000
162,500
335,000
Cat F – Retired/disabled
one dependent
435,000
217,500
445,000
Income Year
IET
Personal reliefs and deductions
Asst Year
2015
2015-2016 2016-2017
Additional Exemption for child
studying undergraduate
- studying in Mauritius
Rs 80,000
40,000
- outside Mauritius
Rs 125,000
Max 3 years
62,500
Max 3 years
Rs 120,000
Max 5 years
Rs 60,000
Max 5 years
Interest relief on secured
housing loan
Rs 135,000 –
max years increased from
3 to 6
No limit on
Amount and
no. of years
Personal reliefs and deductions
Relief for medical or health insurance premium
Asst Year
2015
2015-2016 2016-2017
Cat A – no dependent
12,000
6,000
12,000
Cat B – one dependent
12,000 + 12,000
6,000 + 6,000
12,000 + 12,000
Cat C – two dependents
12,000 + 12,000
+ 6,000
6,000 + 6,000
+ 3,000
12,000 + 12,000
+ 6,000
Cat D – 3 dependents
12,000 + 12,000
+ 6,000 + 6,000
6,000 + 6,000
+ 3,000 + 3,000
12,000 + 12,000
+ 6,000 + 6,000
Cat E – Retired/disabled
no dependent
12,000
6,000
12,000
Cat F – Retired/disabled
one dependent
12,000 + 12,000
6,000 + 6,000
12,000 + 12,000
Solar Energy Investment Allowance
• An individual who invests in solar energy
unit, including photovoltaic kits and battery
for storage of electricity is entitled to deduct
the amount invested from his net income.
• In case of couple, the deduction may be
taken by one spouse or shared equally.
• Any unrelieved amount in an income year
may be carried forward and deducted
against net income of succeeding years.
Exempt income
• Exemption limit of lump sum on commutation of
pension, retiring allowance, severance allowance
etc. increased from Rs 1.5 million to Rs 2 million.
• Basic retirement pension paid to a charitable
institution.
• Income derived by a person engaged in biofarming approved by FAREI for 8 succeeding years
as from income year in which activity is started.
• Income derived by a member of Mauritian diaspora
for first 10 years as from year of return.
Recap – CPS Statement
• ‘every individual who derives gross income falling under
this sub-part and, in respect of preceding income year, had
a chargeable income, shall submit to the Director-General
a CPS Statement ..’
• An individual shall not submit a CPS Statement
where:
–
His gross income falling under CPS for the
preceding income year did not exceed Rs 2 million;
–
The tax payable based on 25% of the chargeable
income of preceding year is less than Rs 500.
S 106(1) CPS due date
In respect of quarter ended
1 July to 30 September
Due date for submission of
CPS Statement and
payment of tax
2 days, excluding Saturdays
and public holidays, before
the end of December
1 October to 31December
31 March
1 January to 31 March
2 days, excluding Saturdays
and public holidays, before
the end of June
Corporate tax
Small company registered with
SMEDA – ITA new section 49B
• ‘Small company’ means a co. incorporated under
Companies Act on or after 2 June 2015 and registered
with SMEDA.
• Where the small company qualifies under a scheme
referred to under section 5A of SMEDA Act, it shall be
exempt from:
– income tax;
– operation of TDS under S 111C
• Exemption not to exceed 8 years
• Unrelieved losses during period of exemption not
available for carry forward
S 50B Advance Payment System
(i) stipulates that the due date for payment of
APS is 3 months from the end of month in
which a quarter ends.
(ii) Where an APS quarter ends in the month of
September, the due date for payment is 2
clear days before end of December
(iii) Where an APS quarter ends in the month of
March, the due date for payment is 2 clear
days before end of June
(iv) APS threshold is increased from turnover of
Rs 4 million to Rs 10 million
S 50B Advance Payment System
(iv) APS threshold is increased from turnover of Rs 4
million to Rs 10 million
(v) Where a company’s accounting period ends in the
month of June and is required to file an APS
statement in respect of the third quarter
, it may
opt to file an APS Statement for 4th quarter
(vi) Due date for submission of 4th APS quarter and
payment of tax is 30th September
(vii) where a company submits an APS Statement for
its 4th quarter, the due date for submission of APS
for the 1st quarter of the succeeding year is 31th
January after the end of that quarter
S 44 A - Alternative Minimum Tax
• AMT abolished with effect from Year of
Assessment commencing on 1st July 2015.
S 50 H Special levy on banks
• Banks would continue to pay the
Special Levy at the current rate of 3.4%
of book profit and 1% of operating
income.
• Lower rates of 1.7 % and 1% would be
applicable as from Year of Asst
commencing 1 July 2018 instead of 1
Jan 2016.
S 50I - Solidarity levy on telephony
service providers
• The solidarity levy at the current rate of 5%
of book profit and 1.5 % of turnover shall
continue to be applicable for Years of
Assessment commencing 1 Jan 2015, 1 July
2015 to 1 July 2017.
• The last applicable Year was - YOA
commencing 1 Jan 2014. Applicability has
been extended by 3 years to now end as
from YOA commencing 1 July 2018.
S 50 L - CSR Fund
• Every company shall set up a CSR Fund
equivalent to 2% of its chargeable income of
the preceding year to implement a CSR
programme in accordance with its own CSR
Framework.
• Approval of CSR Committee no more
required.
CSR Fund (cont)
• CSR programme
– a programme having as its main objects the
alleviation of poverty, the relief of sickness or
disability, the advancement of education of
vulnerable persons,
• Details of CSR projects implemented to be
given in annex to tax return
S 76 - Arrangement for relief from double
taxation and exchange of information
• Minister may enter into arrangement with a country
for relief from double taxation and for exchange of
information in respect of taxes of every kind and
description under the arrangement.
• Notwithstanding the secrecy provision the MRA
may disclosed information to a person authorised
by Government.
• MRA may, for implementation of an arrangement,
require any person to establish, maintain and
document a due diligence procedure.
Penalty for late submission of ROE
by employer
• S93(4A) deleted .
• Employers who are charged penalties for
late submission of ROE may now lodge an
objection if they are dissatisfied.
Representation directly to ARC abolished.
TDS
• Definition of payer amended so that it does
not include a company which has an annual
turnover not exceeding Rs 6 million.
S 116 Return of income by companies
• Where a company’s accounting period ends in
month of June and it has submitted an APS
Statement for 4th quarter, the due date for its
annual return is 31 January following the
accounting period.
• Where a company’s accounting period ends in
month of December, the due date for
submission of return and payment of tax is 2
days, excluding Saturdays and public holidays,
before end of June.
118A Return of income in respect
of approved return date
• A person who has an approved return date
falling between 1 Jan to 29 June, a return
submitted by him under S116 shall be
considered to be in respect of the income
year ending on 30 June following that return
date. E.g Acct year ending 31 March 2015 –
deemed to be for income year ended on
30.6.15 –Asst Year 2015-2016
S 121 Penalty for late submission
of returns of income
• Where a person is a small enterprise with
annual turnover not exceeding Rs 10 million,
the total penalty for late submission of annual
return shall not exceed Rs 5,000 it was Rs
20,000 previously.
• A company that is required to file its annual
return in foreign currency, its shall pay the
penalty for late submission converted into the
same foreign currency at the exchange rate
determined by MRA under S 7 of Customs Act.
S 122 Penalty for late payment of tax
• Where the taxpayer is a small enterprise
with annual turnover not exceeding Rs 10
million, the penalty for late payment of tax
shall be 2% instead 5%.
S 122D Interest on unpaid tax
• Any person who fails to pay tax under S 100
(PAYE), S 111F(TDS), or S129A
(Assessment on employer/payer) shall be
liable to pay in addition to tax and penalty,
interest at rate of 1% per month.
• Any person who fails to pay tax under
section 50F, 106, 112, 116, 119, 129 or 131
shall in addition to the tax and penalty be
liable to interest at the rate of 0.5% per
month.
Cash accounting
• A small enterprise may apply to MRA for his
net income from business to be determined
on cash basis instead of accrual basis.
• cash basis to be applied as from the date
approved by MRA and on such conditions as
may be prescribed.
• ‘small enterprise’ means a person whose
turnover is below Rs 10 million but excludes
a GBL1 and non-resident societe.
S 123 A - Act or thing in respect of
period before 3 years of Asst
• MRA shall not in relation to the tax liability of
a person:
– (a) require any information, statement or return
– (b) make any assessment or claim
in respect of 3 years of assessment preceding the
current year of assessment.
to be effective as from a date to be proclaimed
S123 B - Return for supply of
goods and services
• A co having a turnover exceeding Rs 100
million has to submit a statement giving
details in respect of payments made for the
purchase of goods and services exceeding Rs
100,000.
• Once a co has obligation it shall continue to
file unless otherwise authorised by MRA
• Monthly penalty of Rs 5,000 applies up to
max of Rs 20,000. May also be prosecuted
and be liable to a fine of Rs50,000
Request for information
• S124(1) – Obligation to furnish information:
– notwithstanding S64 of Banking Act’, every
person shall furnish information when required
by DG.
• S127(1) & (2) – Time limit to furnish information
and production of books and records
– time limit reduced from 4 Years of Asst to 3
years
S130 - Time limit to make asst
• Time limit to raise asst reduced from 4 years
to 3 years of Asst
• Power authorising DG to raise asst for time
barred years on ground that no return filed
under S 112 or S 116 or in case of willful
neglect or fraud abolished.
( to be effective as from date proclaimed)
S 131A - Objection to Assessment
• Subsection (1) is amended so that besides
sending a objection on an approved form by
registered post the taxpayer may now also send
the form electronically through a computer
system approved by MRA.
• Subsection 2(b) is amended so that at time of
making objection, a person should now pay
10% of amount of income tax claimed instead
of 30% previously. Effective as from 1 July 2015
131AA- Objection to penalty claims
• S 131AA – New section added– effective 1.7.15
• A person who has been issued a penalty claim
under S93(ROE), S111K(TDS Return) or
123B(5) (Return of supply of goods and
services), may object to the claim.
• The taxpayer should object within 28 days of
issue of claim, give grounds of objection and if
not already done, submit the ROE/ return within
28 days. In case of non compliance, objection
shall lapse.
131 AA - Objection to penalty claims
• Late objection due to illness or reasonable
cause may be considered. Where late
objection not accepted, MRA should notify
the taxpayer within 28 days of receipt of
objection.
• MRA to determine objection within 4 months
• A person aggrieved by determination may
within 28 days lodge written representations
to ARC.
S131B - Objection to
assessments(cont)
• DG to review claim and revise penalty
charged under S 93, 111k or 123B(3) in
whole or in part.
• Notice of determination to be given to
objector within 4 months of date of objection.
S131B - Objection to assessments
• New subsection 10 added to S131B
– Where an agreement is reached before, or a
decision is made by ARC, MRA shall, within 5
working days of the date of receipt of notification
of agreement or decision inform the person of
the amount of income tax payable.
• Where notice is issued, the person shall pay
the amount within 28 days of date of notice.
S 134 - Representation to ARC
• S 93 and 111K deleted from list of
decision/determination against which
representation to ARC is allowed.
• therefore direct representation to ARC
following penalty claims for late filing of
ROE and TDS Return abolished. TP should
go through objection procedures first.
- effective as from 1 July 2015
S141 - Privilege
• privilege inscribed on the properties of a
debtor may be partly erased provided the
other properties of the person is sufficient to
secure payment of the tax.
• Where a privilege is erased, the MRA must
notify the taxpayer within 5 working days
from date of notification by the Conservator
of Mortgages.
Gaming Regulatory Authority
Act
Gaming and betting tax
• Gaming House A in Mauritius – taxed at 30%
of gross takings instead of 15%.
• Totalisator operator conducting bets (other
than win and place) through remote
communication reduced from 12% to 10%.
Thank You
Questions welcomed