Mauritius Personal Tax: Solidarity Levy
There has been some major changes brought to the personal taxation in Mauritius, as announced in the 2020-2021 budget for Mauritius. Amongst others, the solidarity levy was reviewed and meant to be applicable to Mauritian residents. Reduced threshold for the applicability of the solidarity levy As from the income year 2020-2021, the threshold for the applicability of the solidarity levy is being lowered from MUR 3.5m to MUR 3.0m of the leviable income of Mauritius tax-resident individuals. The leviable income of a taxpayer consists not only of the chargeable income and also includes any Mauritius sourced dividend income including the share of the dividend of an individual in a resident partnership or succession. Increase in the standard rate of the solidarity levy As from the income year 2020-2021, the standard rate of the solidarity levy surges fivefold from 5% to 25%. The solidarity levy payable is however restricted to a maximum of 10% of the total of net income and dividend income. Taxpayers deriving emoluments The solidarity levy is collected under Pay As You Earn where monthly emoluments exceed MUR 230,769 in the income year 2020-2021. For employees not submitting an Employee Declaration Form, the rate of deduction is 25% of the amount above MUR 230,769, limited to 10% of total emoluments. Their payroll system would need to be adjusted accordingly. Tax-residence in Mauritius The solidarity levy is only payable by tax-resident individuals who derive leviable income above the prescribed threshold. Individuals are considered tax resident in Mauritius if they meet any of the following conditions: They are domiciled in Mauritius, unless their permanent place of abode is outside Mauritius. They are present in Mauritius for a total of at least 270 days during the current tax year and the two preceding tax years. They are present in Mauritius for at least 183 days during the tax year.
