October 20, 2023
Mauritian Finance Minister issues new regulations on e-invoicing
On 18 September 2023, the Mauritian Minister of Finance issued the first set of Value Added Tax (VAT) E-invoicing Regulations (the Regulations), regarding the implementation of e-invoicing by the Mauritius Revenue Authority (MRA). The Regulations supplement the changes made to the Value Added Tax Act 1998 (VATA) through the amendments made to Part VA of VATA pursuant to section 78(f) of the Finance (Miscellaneous Provisions) Act 2022 (FMPA 2022). Though the amendment made by section 78(f) of the FMPA 2022 is effective as from 2 August 2022, it remains unclear which businesses will fall within the scope of e-invoicing.
Based on its communique, the MRA is introducing the e-invoicing system at the national level in Mauritius in a phased approach. With the advent of this e-invoicing system, providers of products and services will be required to "fiscalize" (i.e., send it in real time to the MRA, which will record and process the information for VAT purposes) their invoices or receipts in real time with the MRA before issuing them to their customers. As part of this significant change, the MRA provided the following guidance prior to releasing the Regulations:
The Regulations are effective as from 2 October 2023. It is worth noting that the Regulations appear to explain the obligations of the business, the MRA and the Electronic Billing System Solution Providers. Based on section 20A(2) of the VATA, only prescribed business categories or business that have been given notice in writing by the MRA are subject to the e-invoicing legislation. To understand how this may affect your business directly, please reach out to the Mauritian tax team identified at the bottom of this Alert.
Though not explicitly stated in the Regulations, it appears that the e-invoicing is in addition to existing obligations under the VATA. Most of the requirements of a VAT invoice under section 20(2) of the VATA are found in the e-invoice requirements in Clause 10 of the Regulations. Businesses may find it challenging to integrate the software prepared by an Electronic Billing System (EBS) Solution Provider with their existing Enterprise Resources Planning System (ERP) or business infrastructure. In addition, the technical specifications could be amended based on feedback provided by the early adopters (as selected by the MRA) of the e-invoicing mechanism.
The scope of e-invoicing, at this point of time, appears to be limited to entities with a minimum turnover of 100 million Maruitian rupees (Rs 100m). The scope of the transaction data will be further provided by the MRA and includes any document that affect turnover. We would expect that the MRA may encounter these challenges if the intention was to apply the e-invoicing mechanism to certain cash-intensive and software-light industries, such as food stalls and informal work (e.g., caregiving, domestic/home services, fishing). Businesses should carefully document any adjustment to their turnover that does not warrant a fiscal invoice to be issued under the e-invoicing system.
The MRA's implementation of e-invoicing will require that a number of specific software systems and appropriate technical infrastructure be issued. At a high level, there are three components that will need to be considered in appreciable detail. These are:
This Alert summarizes the key provisions of the Regulations primarily of interest to multinational businesses doing business in Mauritius.
Electronic Billing System
The e-invoicing system shall receive, store and monitor transaction data and transmit data back to the EBS for the purpose of issuing fiscal invoices. The EBS is an electronic system designated for use in business for efficiency in management controls with respect to sales and stock control. The EBS would also include an ERP and Point of Sale (POS) solution.
The e-invoicing system shall be composed of the EBS that businesses use in their operations in conjunction with the Invoice Fiscalization Platform (IFP).
Section 20A of the VATA provides that the scope of e-invoicing should be prescribed through regulations. This section grants the MRA wide powers to identify businesses that fall within the scope of e-invoicing and to prescribe the business categories/nature that fall within the scope.
Businesses within the scope of the e-invoicing will have the following obligations:
The MRA expects the EBS to enable the following:
The businesses will have an obligation to ensure that the EBS is:
The operation of the EBS must comply with guidelines and technical specifications that the MRA issues pursuant to section 20A(4) of the VATA.
Invoice Fiscalization Platform
The MRA shall operate the Invoice Fiscalization Platform, which is an electronic system that:
The transaction data transmitted by an EBS to the IFP shall include particulars in a form and manner determined by the MRA. We anticipate that the MRA will provide clarity on this area subsequently.
EBS Solution Providers
The EBS Solution Providers must register with the MRA, providing the particular brand and model of the EBS they will be using. The EBS Solution Providers will only be registered once they have certified in writing that the EBS is compliant with the technical and functional specifications published under section 20A(4) of the VATA, after having tested the EBS on the MRA's e-invoicing developer portal.
The EBS Solution Providers must provide the MRA with access to the EBS and provide information/particulars as requested.
Registration of EBS by taxpayers
A taxpayer who develops an ERP for his business shall, before implementing the ERP, apply to the MRA to register every EBS connected to the ERP. The EBS can only be provided from an EBS Solution Provider registered with the MRA.
A fiscal invoice consisting of the following particulars must be issued for each transaction:
It would be helpful if the MRA were to clarify that no separate VAT invoice is required in the context of a business that operates the e-invoicing system.
The MRA will have the power to deregister an EBS and a EBS Solution Provider for certain reasons, including failure to comply with technical specifications, defects, and failure to share material facts about the EBS.
For additional information with respect to this Alert, please contact the following:
Ernst & Young (Mauritius), Ebene
Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor