VAT Registration Threshold in Mauritius — Rs 3M Rule Explained

The VAT registration threshold in Mauritius has changed — and many small business owners are only now realising it affects them. If your annual turnover used to sit just above Rs 6 million, you may think you are exempt. That is no longer the case.

What Changed?

The government reduced the VAT registration threshold from Rs 6 million to Rs 3 million per year. This means any business whose taxable turnover exceeds Rs 3 million in a 12-month period must register for VAT with the MRA.

The change brings thousands of additional businesses into the VAT net, particularly in the services sector — consultants, freelancers, agencies, and IT providers who may have operated below the old threshold but now cross the new one.

Who Must Register?

You must register for VAT if:

• Your taxable turnover exceeds Rs 3 million in any rolling 12-month period.
• You expect your turnover to exceed Rs 3 million in the next 12 months.
• Your turnover exceeded Rs 3 million in the previous 12 months and you have not yet registered.

“Taxable turnover” includes all supplies subject to VAT at the standard or zero rate. Exempt supplies do not count towards the threshold, but if your main activity is exempt and you make some taxable supplies, you may still need to register.

Registration Deadlines

Timing matters. The MRA requires you to register within 21 days of the date your turnover first exceeded Rs 3 million. Late registration can result in penalties and backdated VAT liabilities — meaning you owe VAT on every taxable sale from the moment you crossed the threshold, even if you did not charge it at the time.

If you are already past the threshold and have not registered, it is not too late to fix the situation. The MRA generally applies smaller penalties for businesses that come forward voluntarily.

What Happens After You Register?

Once registered, you must:

• Charge 15% VAT on all standard-rated supplies.
• Issue tax invoices that include your VAT registration number.
• File VAT returns (monthly or quarterly, depending on your annual turnover).
• Pay the net VAT due to the MRA by the deadline specified in your return.
• Maintain proper records of all taxable transactions for at least 6 years.

Common Mistakes

1. Ignoring the rolling 12-month test. You do not wait until the end of the financial year. If you cross Rs 3 million at any point, the clock starts.
2. Not including zero-rated supplies. Exports and certain other supplies are zero-rated, but they count towards your registration threshold.
3. Forgetting to issue VAT invoices after registration.Once you are registered, every invoice must show your VAT number and the VAT charged.

How Fanal Makes It Easier

If you have just crossed the threshold and need to start issuing VAT invoices, Fanal can help. Every invoice includes your VAT number automatically, calculates the correct VAT amount, and generates compliant invoices in seconds. Start free and take the complexity out of your first VAT period.