Y Ltd is a domestic company engaged in property development. Its current project involved the construction of villas for short-term rental.
The directors approached Finctax to assist with the company’s tax compliance needs. In the first instance, they asked us to assist with their annual and quarterly corporate tax returns solely. As part of our review for the preparation of the corporate returns, we queried the tax deduction at source on invoices received by and issued from the company.
After further discussions with the clients, they also engaged us to deal with the company’s tax deduction at source (“TDS”) and Value Added Tax (“VAT”) compliance as they realized that it would save them valuable time.
Accordingly, on the TDS front, we reviewed invoices prior to issue to ascertain whether any tax needed to be deducted at source on payments made by the company. We ensure that we reply promptly in respect of invoice vetting for TDS such that payments are never delayed due to the response time. We then file TDS returns whenever applicable.
For VAT, we first registered the company for VAT which included liaising with the Mauritius Revenue Authority (“MRA”) to obtain the registration certificate. We prepare the VAT returns on a quarterly basis and once approved by the directors, we submit them on behalf of the company.
As anyone involved in property development will attest, cash flow during the construction phase of a building can be a major concern. Any VAT refund during this period would be highly welcomed – as is the case for Company Y Ltd. The company is currently owed a refund by the MRA. As part of our work, we review invoices to ensure that they meet the conditions set out by the MRA in order to be considered a proper VAT invoice.
An incorrect VAT claim can lead to penalties while a delay in the repayment outside the time limit by the authorities entitles a registered person to interest on any repayment. We prepared and submitted the repayment claim on behalf of the company. The invoice review undertaken by Finctax was critical to pre-empting any queries by the MRA. We monitored the response from the MRA to ensure a timely and correct repayment for the company.
