The Maldives Inland Revenue Authority (MIRA) is a completely independent body responsible for levy administration in that country. MIRA collected 78.1 percent of the total profit collected by the government of Maldives in 2018. The main functions of MIRA include the application of levy laws, discharge of levy programs, and offering specialized advice to the government in determining levy programs. The Tax Administration Act stipulates the other functions of MIRA. A levy resident is subject to income duty on worldwide income. A non-resident is subject to income duty in respect of income that’s obtained from there. Levy rates are applicable for different types of commercial taxpayers. MIRA was established on August 2, 2010, as a separate and independent legal reality. Following the establishment of MIRA, an ultramodern duty system was introduced to the Maldives via the Tourism Goods and Services Tax Act in January 2011 and the Business Profit Tax Act in July 2011.
Regulations of taxes administered
MIRA administers a number of laws and regulations. In addition to the administration of duty laws, MIRA also collects a number of freights and levies.
Income tax act
Income Tax is levied under the Income Tax Act (Law Number25/2019). Remuneration will come within the horizon of income effective 1 April 2020. The Business Profit Duty governance assessed under the Business Profit Tax -would be repealed with the beginning of Income Duty. Tax residents of Maldives are taxed on their worldwide income, whereas non-residents are taxed on the income deduced from that country. It covers income entered through conducting business, employment income, and banking.
Tourism goods & services tax act
Under the Act, T- GST is charged on the value of goods and services supplied by travelers resorts, travelers hotels, guest houses, easy street islets, and on certain other services supplied by places offering services to travelers. The levy rate was 3.5 percent, and the T- GST Act was abolished following the start of the Goods and Services Tax Act.
Goods & services tax act
In October 2011, the T- GST governance was repealed and replaced by the Goods and Services Tax (GST) Act. It came into effect on 2nd October 2011 and expanded the levy to all sectors of the economy. It assessed a GST at the rate of 3.5 percent from 2nd October 2011 to 31st December 2011 and 6th from 1st January 2012 to 31st December 2012. The GST rate on “tourism goods and services” increased to 8 percent on 1st January 2013 and to 12 percent on 1st November 2014. The GST rate on” general” goods and services remains at 6 percent from 1st January 2012.
Business profit tax act
The Business Profit tax Duty (BPT) Act came into effect on 18th July 2011. Under the Act, levies are assessed at the rate of 15 percent on profit gains exceeding half a million MVR (approx. USD 32,425) annually. A lower rate of 5 percent is applicable to companies’ resident in the Maldives generating all of their income from outside the country. Further, if any payment specified in Section 6 of the Act is made by a business to a non-resident, a withholding levy at the rate of 10 percent is assessed on the gross quantum of a similar payment.
Green tax
A Green levy is a levy outstanding by travelers who stay in tourist resorts, and travelers’ restaurants. It’s also paid off by travelers who stay in tourist guesthouses from 1st October 2016 onwards. Green levy is outstanding at the rate of USD 6 per day of stay from travelers’ resorts. Maldivians and resident permit holders aren’t needed to pay Green Tax.
Bank profit tax act
Banks operating there are needed to pay 25 percent of taxable profit as Bank Profit Tax. Banks are excluded from paying Business Profit tax duty. The Business Profit Tax Act was repealed with the start of the Income Duty on 1st January 2020.
Airport taxes and freights act
This Act prescribes all matters relating to the levying of Airport Service Charge as a levy and Airport Development Fee as a fee, on passengers departing from the Maldives from an airfield in that country. Airport Service Charge (ASC) is levied on passengers departing the Maldives from an airfield over there, Persons with special privileges, traveling passengers, and children under the age of 2 are excluded from ASC. USD 12 per Maldivian passenger. Only passengers with special privileges are exempted from ADF.
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