Welcome to the Maldives Tax Newsletter where you will find highlights from national developments in tax law and policy.

Tax Law

Maldives Inland Revenue Authority (MIRA) Publishes Tax Ruling (TR-2025/A19): Procedure for Redetermination of the Amount of Tax

On 27 February, MIRA published its tax ruling on its procedure for tax reassessments.

Highlights from the ruling include:

It states that the procedures outlined in Chapters 3 and 4 of the Tax Administration Act (TAA) or Chapter 3 of Business Profit Tax Act (BPT Act) will be relied upon during reassessments.
It clarifies the situations in which an audit notice is deemed to have been sent.
It sets out the procedure for when a decision by a tribunal or a court to reassess is stayed.
It outlines situations where reassessment cases will be suspended.
It states that MIRA can rely on the documents submitted during the initial audit and objection.

Tax Cases

Champa Brothers Maldives Private Limited v MIRA [TAT-CA-B/2023/002]

On 27 February, the Tax Appeal Tribunal (Tribunal) passed its judgement in Champa Brothers Maldives Private Limited v MIRA [TAT-CA-B/2023/002]. The Tribunal decided, inter alia, that interest on a loan acquired for investing in a resident company is a deductible business expense, despite resident dividend income being deductible for business profit tax purposes.

Hillside Villa Private Limited v MIRA [TAT-CA-W/2022/006]

On 27 February, the Tax Appeal Tribunal passed its judgement in Hillside Villa Private Limited v MIRA [TAT-CA-W/2022/006].

In its judgement, the Tribunal highlighted the following:

The appellant’s objection to the validity of the audit notice cannot be submitted at this stage as it could have been raised during the earlier objection stage. The Tribunal found that although Minor International (Labuan) Limited v MIRA [2022/SC-A/13] and Prosecutor General’s Office v Amin Construction Private Limited and Another [2021/SC-A/105] state that the subsection of the referenced provision under which an audit notice is sent must be stated on the audit notice, this rule cannot be applied retrospectively.
Regarding taxpayer’s argument that the audit notice must be sent under TAA rather than BPT Act, Tribunal stated that the special act (BPT Act) supersedes the general act (TAA).
The appellant has not adequately discharged its burden of proof regarding its claim that withholding tax cannot be payable on the management fee paid to Soneva Management (BVI) Limited as it is a resident company of the Maldives.

MIRA v Unimax Maldives Private Limited [3749-CVC-2022]

On 10 February, the Civil Court passed its judgement in MIRA v Unimax Maldives Private Limited [3749-CVC-2022]. The court decided, inter alia, that the defendant cannot object – during the ongoing Civil Court case – to the substantive tax issues identified by MIRA at the audit and objection stage. The court stated that the forum for raising these objections is the Tax Appeal Tribunal. The court referenced Section 44 (a) and 49 (a) and (b) of the Tax Administration Act in reaching this decision.

Conclusion

Thank you for reading this edition of our newsletter. We hope you found the updates valuable. If you have any questions or would like any further information, please do not hesitate to contact us.

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