Mauritius to implement the E-invoicing system!

Back in 2022, the Mauritius Revenue Authority (“MRA”) amended its VAT legislation through the Finance Act to provide for the e-invoicing system. The regulations in relation to the e-invoicing system have recently been released and confirmation has been received that the project will go live in early 2024. Today we unpack what this means.

The e-invoicing system allows the transfer of billing information electronically between the buyer, seller and the MRA in real time. With the e-invoicing system, all businesses or economic operators will be required to generate invoices, debit notes and credit notes in electronic format through a compliant Electronic Billing System (“EBS”). Invoices generated will then be sent to the MRA’s Invoice Fiscalisation Platform (“IFP”) for fiscalisation of the transactions, which basically means that the MRA records the transaction on its system and assign a code to it.

1. The Supplier issues an e-invoice and sends to MRA via EBS;
2. The MRA verifies the e-invoice, generates a QR code and Invoice Registration Number (“IRN”) and sends the invoice back to the Supplier;
3. The Supplier issues a fiscal invoice to the Buyer.

It should be noted that only authorised EBS solution providers can sell, rent or make available an EBS to taxpayers. The list of authorised EBS solution providers is expected to be published on the MRA’s website soon.

All businesses, irrespective of whether registered for VAT or not will be impacted, but it will be implemented in stages as follows:

Stage One: Applicable to businesses with turnover more than MUR 100 million (approx. USD 2,2 million);

Stage Two: Businesses with turnover between MUR 50 million and MUR 100 million;

Stage Three: All VAT registered persons;

Stage Four: Other specified businesses (including non-VAT registered persons)

The above stages will start to run early this year, but there is no set timeline on how they will progress.

Some of the key benefits of this system are as follows:

• Enhanced and automated processing of invoices.
• Fast tracking of VAT refunds and reduced time for tax audits.
• Pre-filled VAT returns allowing for adjustments.
• Elimination of VAT annexes and Statement for purchases of goods and services.
• Live data collection allowing economic analysis and predictions.
• Paperless storage of invoices (environment friendly).

However, like all new changes, this system does not come without its challenges, and we expect some increased costs in getting the system implemented as well as inevitable teething problems as everyone gets used to it.

Any person who fails to issue fiscal invoices shall be liable to pay a penalty of MUR 10 000 for every month or part of the month during which such failure occurs provided that the total penalty payable shall not exceed MUR 200 000. And do not even think about tampering with the e-invoicing system as any person who misuses or deliberately tampers with the e-invoicing system shall be liable to a penalty of MUR 50 000 and may be prosecuted.

This system will provide a level playing field between businesses as it will reduce fraud, increase compliance and revenue at the same time. You will need to ensure that your current EBS is compliant with the rules and is registered with the MRA, especially if your business has a turnover exceeding MUR 100 million. For those having smaller businesses, we believe that more time will be allocated for them to implement this system as it appears to be very costly. We do expect that the expenses will be eligible for additional tax deductions.

Do stay tuned for more details of the upcoming stages and applicable rates.

It definitely looks like a lot to take on, but we can help your business comply with the conditions of the e-invoicing system.