Nissar Chamroo, ADIT
The Mauritian Revenue Authority has recently issued a communique on their portal to inform taxpayers that have revenue exceeding MUR 100M, to ensure that they are e-invoice compliant.
With a list of registered Electronic Business System (“EBS”) Solution Providers – Taxpayers must now ensure that they are compliant with the new regulations in place.
Let’s take a look at what e-invoicing is and how it will impact your Business!
What is E-invoicing and why is it important?
E-invoicing, in a nutshell, is the ability to fiscalise invoices or receipts in real time with the Mauritius Revenue Authority (“MRA”) before issuing them to their customers. In general, a business / operator uses an accounting package (like Xero, quickbooks) / POS / ERP, also referred to as an Electronic Billing System (EBS), in order to invoice its customers for the sales made.
Thus, as soon as a customer purchases an item – this information must be sent to the MRA in real time and a QR Code will be sent back to the issuer/seller to be printed on the invoice copy.
Advantages of implementing the e-invoicing system are:
• promotion of a level playing field:
• keeping up to date with the current worldwide evolution in taxation:
• fostering business transparency with external stakeholders:
• boosting technological readiness of economic operators to exchange invoices in real time and:
• promoting the image of Mauritius as a good place to do business as well as improving tax compliance.
Will my business be impacted by this E-invoicing?
At a preliminary stage, Businesses having a turnover exceeding MUR 100 M who have been contacted by the MRA, will need to ensure that they are able to issue e-invoice compliant Invoices to be fiscalised in real time to the MRA. The deadline is 15th May 2024.
However, the e-invoicing requirement will be gradually extended to other taxpayers over the course of time. More information on this is expected to be shared in due course.
E-invoicing Compliance : the Carrot and the Stick
With e-invoicing, businesses will be sharing real-time information with the MRA. It is expected that the businesses will have robust internal compliance procedures such that the data they provide corresponds with the VAT returns that they will file. It is good to note that VAT remains one of the highest revenue sources for the MRA. Even though it looks like it might cost an arm to implement E-invoicing through a registered EBS Solution provider, however, not doing so will eventually lead the business to pay fines of MUR 10,000 per month for non-compliance. Moreover, this could further lead to VAT assessments and further interest and penalties to be paid by the taxpayer. Not to mention the unseen costs of collating the required information and documents to be provided to the MRA in these lengthy tax audits!
Some pitfalls of e-invoicing non-compliance are:
– Administrative Fines
– Legal Sanctions
– Tax Audits
Shifting Sands of Global E-invoicing compliance
E-invoicing is now a reality in various parts of the globe: France, Malaysia, India, Saudi Arabia, Mexico and Brazil have all either adopted or are in the process of implementing E-invoicing. A whooping 80 countries around the world have already implemented e-invoicing at some stage.
In December 2022, the European Commission declared a series of VAT Measures through the ViDA (“EC Vat in the Digital Age”) report . The ViDA report explains that switching to electronic invoicing will help reduce VAT fraud by up to €11 billion per year over the next 10 years. We can expect a similar increase in VAT collection at the level of Mauritius.
Concluding Remarks
E-invoicing is now a reality for businesses in Mauritius. The sooner that businesses modify their invoicing systems to cater for this change, the better it is. While it may appear to be an initial cost burden on the taxpayer to be e-invoice compliant – this step would help the company be more digital and streamline certain processes.
About the Author
Nissar Chamroo, ADIT
Nissar is a seasoned tax professional working in the Mauritian and African tax jurisdiction helping to facilitate Tax Automation and Tax Processes in both Domestic and Global Companies. His expertise ranges from Tax Compliance processes such as VAT, TDS Payroll Taxes and Corporate taxation to International Tax Principles such as Transfer pricing and tax structuring across borders.