FAQ’s : VAT Refund Scheme on Residential Building or Apartment
- What this scheme is about?
Under this scheme a person may apply for a refund of VAT on the construction of a residential building or the purchase of a residential apartment or house from a property developer.
- Who can apply for a refund of VAT under this scheme?
Any person who is a citizen of Mauritius of 18 years of age or over and whose annual net income for income tax purposes and that of his spouse does not, in the aggregate, exceed Rs 2 million.
- What are the other conditions to be met to be able to apply for the refund?
- The construction of the residential building, house or residential apartment must be started and completed in the years 2014 to 2019 and in the period of 6 months ending 30 June 2020;
- The applicant or his spouse must be the owner or co-owner of the residential building or residential apartment; and
- The cost of the construction of the residential building or the purchase price of the residential apartment or house must not exceed Rs 4 million;
- The claim for refund shall not be in relation to a property on :
- Pas Geometriques;
- Real State under the Investment Promotion ( Real State Development Scheme) Regulations 2007;
- Property Development under the Investment Promotion (Property Development Scheme) Regulations 2015;
- Invest Hotel under the Investment Promotion (Invest Hotel Scheme) Regulations 2015;
- Smart City under the Investment Promotion ( Smart City Scheme) Regulations 2015.
- If the cost of the construction of the residential building or the purchase price of the residential apartment exceeds Rs 4 million can an application still be made for the refund of VAT on the first Rs 4 million?
No. An application for refund of VAT would be entertained only where the cost of the construction of the residential building or the purchase price of the residential apartment does not exceed Rs 4 million.
- What is the maximum amount of VAT that an applicant can claim for the construction of a residential building or the purchase of a residential apartment?
Any refund of VAT to the applicant and his spouse must not in the aggregate, exceed Rs 500,000.
- How and when to apply for a refund of VAT under the scheme?
An application for refund must be made on form VAT 7 C within 30 days from the end of every quarter during which the VAT has been paid.
An application will not be entertained where it is made more than 12 months from the date of payment of the final amount of VAT or from the date of final payment to the property developer.
- Can a claim for refund be made in respect of any amount of VAT paid during a quarter?
An application must be made only if the amount refundable in respect of a quarter exceeds Rs 25,000. If the amount refundable does not exceed Rs 25,000 in respect of a quarter, it may be claimed in the subsequent quarter provided the total amount claimed in the application exceeds Rs 25, 000. This would not apply in respect of the final application.
- What documents should be submitted with an application for refund under the scheme?
The following documents must be submitted with the first application for refund in respect of the construction of a residential building or purchase of a residential apartment or house:
- VAT invoices issued under section 20, in respect of the construction of a residential building ;
- Receipts issued under section 19(2)(c), in respect of the purchase of a residential apartment or house from a property developer.
- Contract / agreement between applicant and building contractor or deed of sale between applicant and property developer,
- Building permit in the name of applicant from district council/municipality.
- Deed of purchase of land ( in case of construction)
- Evidence of income, e.g payslip for employee or income statements for self-employed.
For subsequent claims VAT invoices or receipts, as applicable, must be submitted.
- How much time does it take for an application for refund to be approved by the MRA?
The MRA will proceed with the refund within 30 days from the date of receipt of the application, provided all conditions are satisfied and relevant documents submitted.
- How to calculate the deemed VAT that can be claimed for refund upon the purchase of a residential apartment from a property developer?
The deemed VAT can be calculated as follows : Purchase price x 0.104What about payment by instalment? Where the payment is made by instalment, the amount to be claimed in a particular quarter is to be calculated as follows - Amount paid x 0.104 , provided the total amount claimed does not exceed purchase price x 0.104.
- Where can the application form, VAT 7C, be obtained?
Application form (VAT 7C) may be downloaded from the MRA website.