The introduction of a Corporate Climate Responsibility Levy was announced as part of the Mauritius National Budget 2024/2025. This measure calls on the business community to actively contribute to the fight against the effects of climate change in Mauritius. The CCR Levy was subsequently codified on 27 July 2024 and applies as from the year of assessment, starting 1 July 2024.
Key Facts
- The levy is calculated at 2% of chargeable income
- It applies to companies and sociétés with a turnover exceeding MUR 50million
- It includes companies with a global business licence
- It is applicable as from the year of assessment starting 1 July 2024
Who Does It Impact?
The CCR Levy applies to companies that are tax resident in Mauritius. The legislation defines companies as corporate bodies, including:
- Companies with global business licences;
- Protected cell companies and variable capital companies;
- Foundations; and
- Trusts.
In addition, the definition of a company has been extended for the purposes of the CCR Levy only to include tax resident sociétés (for example, partnerships).
What is the Threshold?
Companies and sociétés will be subject to the CCR Levy if their turnover exceeds MUR 50 million in a year of assessment.
It is important to note that turnover means the gross income of the company including any exempt income, such as dividends derived from a company that is tax-resident in Mauritius.
How is It Calculated?
The CCR Levy is levied at 2% of a company's chargeable income. Chargeable income refers to the amount remaining after deducting all allowable deductions from the company’s taxable income. In practice, it is likely to be the same amount subject to income tax.
When Does It Apply?
As the CCR Levy applies from the year of assessment commencing 1 July 2024, it will apply to all companies with financial years ending as from 1 January 2024.
Therefore, companies and sociétés with a turnover exceeding MUR 50 million may need to manage their cash flow to cater for the levy.
What Is the Administrative Process?
The CCR Levy is reported on the company’s corporate income tax return or the société’s annual return of income as applicable and payable upon submission of the filings to the tax authorities.
Unlike corporate income tax and in the case of domestic companies, the Corporate Social Responsibility charge, the CCR Levy is not payable in advance under the quarterly Advance Payment System.
During the National Budget, it was announced that a Climate and Sustainability Fund would be set up to implement the government’s initiatives to combat climate change. It was implied that the CCR Levy payments would be deposited into the fund.
What Does It Mean for Your Company?
If your company derived a turnover above MUR 50 million in a financial year ending after 31 December 2023, the CCR Levy may apply and you may wish to consider the cash flow implications.
Furthermore, companies with a global business licence (“GBC”) were historically excluded from socially-geared taxes such as the corporate social responsibility levy. However, GBC with a turnover above MUR 50 million may now be confronted with an additional tax burden.
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Read the original publication at ENS