Penalties and Interests

Income Tax Return (ITR):

The types of penalties and interest that apply in case the annual return of income has been submitted after the deadline date are as follows:

· Penalty for late submission of annual income tax return

A person who fails to submit a return before the deadline date shall be liable to pay a penalty of MUR 2,000 per month until it has been submitted and is subject to a ceiling of MUR 20,000. However, if the person is a small enterprise where its turnover does not surpass MUR 10 million or a person who is not in business shall be liable to a ceiling of MUR 5,000.

·  Penalty for late payment of tax

If a person’s turnover exceeds MUR 10 million, he shall be liable to pay 2.5% of penalty and if the turnover does not exceed MUR 10 million, 1% penalty will be applied on the tax payable.

· Interest for late payment of tax

An interest of 0.25% is applied every month or part of the month on tax payable in case of late payment during which the tax remains outstanding after the due date.

Value Added Tax (VAT):

For VAT filing, the penalties and interests are as follows:

· Penalty for non-submission of VAT Return

If the turnover of the company or individual exceeds MUR 10M, he shall be liable to pay a penalty of MUR 2,000 every month or part of the month and up to a limit of MUR 20,000. Nevertheless, if turnover does not exceed MUR 10M, the company should be liable to pay a maximum of MUR 5,000.

· Penalty for late payment of tax

Compared to Income Tax Return, the penalty for late payment of tax is 10% of the amount of VAT payable according to the VAT Act.

· Interest

An interest of 1% is applied per month on the tax payable due from the date that the tax is due up to the date the tax has been paid.

· Failure to register for VAT

A person who fails to register for compulsory registration shall be liable to pay a penalty of MUR 5,000 each month or part of the month up to the month he is registered for VAT. Additionally, the penalty is capped at MUR 50,000.

·  Interest on tax due or amount due or refunded in excess

Interest of 1% per month or part of the month shall be applied on the following:

(a) Any tax due as per the VAT Act. It applies from the date the taxpayer has not paid to the date of payment. For example, if the deadline for filing is on 29 January 2026 and the return was filed on 15 March 2026, the total interest will be calculated based on 3 months. The part of month of March is treated as 1 month.

(b) Any amount claimed in excess from the date the taxpayer received the payment till the date the excess has been refunded to the MRA. For example, if a person claimed MUR 25,000 on 6 April 2026 but the correct refund entitlement was MUR 20,000, the excess MUR 5,000 is to be refunded to the MRA. As such, if the person has refunded on 15 June 2026, interest will be calculated on 3 months and thus June will be counted as a month.

(c) Any amount claimed by mistake and the MRA can demand the excess back. The interest shall apply from the date the excess has been claimed up to the date it has been refunded to the MRA. In addition to this, if the taxpayer has not refunded the excess, the interest will continue to apply until it has been paid. For example, if a person incorrectly claimed motorcycle for personal use on 07 August 2025 and MRA discovered it during investigation on 10 December 2025. Interest will be applicable but until the date the incorrect claim has been refunded. Moreover, if the person refunded on 11 January 2026, the interest will be calculated based on 6 months (07 August 2025 – 11 January 2026).

· Repayment overclaimed

If it is found that a person has claimed a refund amount higher than what they are entitled to, that person will be required to pay a penalty equal to 20% of the excess amount claimed. However, the penalty cannot exceed Rs 200,000.

·  Failure to use e-invoicing system

A person who is required to use e-invoicing shall be liable to a penalty of MUR 200,000 and is subject to imprisonment to a maximum period of 12 months.

· Improper use of or infringement of e-invoicing system

Using the e-invoicing system to mislead the Director General or invading the e-invoicing system is an indictable offence and the person shall be liable to pay a penalty capped at MUR 200,000 and he shall be liable to incarceration of a maximum period of 12 months.

Pay As You Earn (PAYE):

An employer shall file and pay the tax not later than one month given that he has withheld the tax. Furthermore, a registered employer for the purposes of PAYE shall submit and pay the tax one month due following the month PAYE has been withheld and this is applicable until he ceases to be an employer. Failure to do so would entail penalties described as follows:

· Penalty for late payment of tax

If an employer pays the amount of tax after the prescribed deadline date, a 10% penalty of the amount of tax unpaid shall be applied. The amount of income tax under PAYE includes the Fair Share Contribution.

·  Penalty for failure to join electronic system

If the registered employer has not submitted PAYE return, and has not joined the electronic system, the Director-General may give a written notice to the employer. As such, the employer has 7 days to join the electronic system and he fails to do so, he shall be liable to pay a penalty of MUR 5,000 every month or part of the month from the notified date up to the month he submits its return and shall not exceed MUR 50,000.

· Interest for late filing

0.25% per month or part of the month is charged on the amount due until it has been fully settled.

Tax Deducted at Source (TDS):

TDS operates similar as PAYE and under this system, the payer is required to deduct the amount of tax using the appropriate rate under sixth schedule of the ITA 1995. The payer shall remit the amount of tax deducted to the MRA while the payee shall claim the same amount when computing the income tax return. The penalty and interest are as follows:

· Penalty and interest for late payment of tax

If the payer has not remitted the TDS or has paid the tax on after the due date, he shall be liable to pay 2.5% of the unpaid tax.

· Interest on unpaid tax

0.25% of interest shall be paid of the remaining tax due per month or part of the month if the payer has not paid the tax.

Fair Share Contribution (FSC):

The Fair Share Contribution (FSC) is an extra tax managed by the Mauritius Revenue Authority (MRA) that applies to companies with chargeable income over MUR 24 million per year, following changes from the Finance Bill 2026. Starting January 1, 2027, the eligibility conditions related to turnover and VAT registration will be removed. Companies paying a 15% income tax will owe FSC at a rate of 5% on their chargeable income, while those taxed at 3% will pay 2%. Additionally, banks will face a 5% FSC on chargeable income, plus an extra 2.5% on income from transactions with residents, excluding global business entities. In case of late filing, the penalties and interests will be as follows:

· Penalty for late payment

A penalty of 2.5% is levied on unpaid contribution in case of late filing of FSC statements.

· Interest

The interest levied for late filing is 0.25% per month or part of the month.