Mauritian Finance Minister issues new regulations on e-invoicing

The e-invoicing system allows a business to electronically connect billing information between the buyer, seller and the Mauritius Revenue Authority (MRA) in real time. The Regulations provide certain technical specifications on the operations of the e-invoicing system. Regulations on the entities and industries that are within in the scope of the e-invoicing system have not yet been prescribed. This Alert summarizes the key provisions of the Regulations primarily of interest to multinational businesses doing business in Mauritius.

Executive summary

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:

• Standard e-invoice template
• General (non-technical) e-invoicing guide for software developers
• Functional specifications of Electronic Billing Systems
• Access to the e-invoicing developer portal

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:

1. Electronic Billing System
2. Enterprise Resource Planning System
3. Invoice Fiscalisation Platform

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:

• Operate, for each business, one or more EBS for issuing fiscal invoices to customers
• Acquire an EBS from an EBS Solution Provider registered with the MRA as an EBS vendor certified as compliant with technical specifications approved by the MRA
• Acquire and install requisite networking equipment and software to enable the EBS to connect to the IFP
• Arrange for data connectivity with a network service provider for online transmission of transaction data from the EBS to the IFP at a speed that enables instant fiscalization of the transaction to the MRA's satisfaction
• Not use or keep on its business premises any billing system, enterprise resource planning software, cash register, POS solution, or any such device that
  • Is not registered with the MRA under the Regulations
  • Is not compliant with the technical specifications issued under VATA section 20A(4)

The MRA expects the EBS to enable the following:

• Generate transaction data, for transmission to the IFP, as the MRA may determine
• Registered with the IFP and have an identification number issued by the MRA
• Use the IFP authentication mechanism set up by the MRA prior to transmitting data for fiscalization
• Be capable of receiving the fiscal data in respect of the transaction and record the of the transaction's Invoice Reference Number (IRN) in the taxpayer's invoicing system after the invoice has been finalized
• Format and issue fiscal invoices to the customer with the Quick Response (QR) Code that appears on it

The businesses will have an obligation to ensure that the EBS is:

• Identifiable by the e-invoicing system as belonging to a particular taxpayer
• Properly configured and compliant with the MRA's functional and technical specifications
• Capable of communicating with the IFP to enable fiscalization of transactional data and capable of issuing fiscal invoices
• Capable of securely storing information on transactional data
• Securely store any username, password, EBS identification number or token issued by the MRA and take necessary measures to maintain their confidentiality

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:

• Manages the registration, change in status and deregistration of each EBS
• Enables a registered EBS to connect to the IFP
• Authenticates every EBS that transmits transaction data to the IFP
• Receives, records and monitors transaction data transmitted by an EBS
• Generates an IRN and a QR Code for every invoice that has been fiscalized and sends fiscal data back to the EBS
• Securely maintains the privacy and integrity of every digital certificate and digital signatures

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.

Fiscal invoices

A fiscal invoice consisting of the following particulars must be issued for each transaction:

• The type of invoice
• The type of transaction
• The method of payment
• The EBS registration number
• The name and product code of each good or service supplied
• The unit price and quantity of each good or service supplied
• The total price of the goods or services supplied
• The taxes that are a part of the invoice and the tax rates applied
• The total amount payable by the customer
• If the customer is a person in business, the customer's Business Registration Number (BRN)
• If the customer is a person who is not in business, the name, address and National Identity Card number of the customer if requested
• The name and BRN of the supplier and the identification of the business premises where the transaction occurred
• The date and time the invoice is issued
• The sequential serial number of the invoice
• The QR Code and IRN generated by the IFP for the transaction
• Other information requested by the MRA

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.

Deregistration

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

• Ryaad Owodally
• Akshay Gowrisunkur
• Assad Khoosee
• Vashist Hassea

Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.