Business profits tax
Under the Business Profits Tax (BPT) Act of 2011, a business profits tax is imposed at a rate of 15%. All persons, including individuals accruing profits from businesses, are subject to the tax on their taxable profits. The first MVR500,000 (USD32,425) is exempt from tax. Specified payments, such as management fees, technical services fee, royalty and rent for immovable property, made to nonresidents are subject to withholding tax at a rate of 10%.
Certain expenses are allowed or disallowed for BPT purposes. For example, receipts that been subject to withholding tax are deductible, while private expenses are not deductible.
Losses incurred in a tax year can be carried forward and deducted against profits of the subsequent five tax years.
Companies that are registered with Maldives Inland Revenue Authority are required to file the following BPT returns and make the following payments:
- First interim return due on 31 July of the tax year: one-half of the total tax paid in the preceding tax year
- Second interim return due on 31 January of the following tax year: one-half of the total tax paid in the preceding tax year
- Final return due on the later of six months after the end of the accounting period or 30 April of the following tax year: any balance of tax due
Goods and services tax
Goods and services tax (GST) is levied at a rate of 6% on general goods and services supplied in the Maldives. The rate of GST for the tourism sector is 12%. Effective from 1 November 2015, a green tax of USD6 per occupying guest is levied. A GST return must be filed by the 28th day of the month following the end of the tax period.
Foreigners going to the Maldives for employment are required to obtain a work permit from the employer. Work permits are issued by Maldives Immigration, which requires that employers deposit a sum of money as a work permit deposit for each employee. A monthly visa fee of MVR250 applies for foreign workers.
Business visas also can be obtained from a Maldivian sponsor for a maximum of 90 days.