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

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Tax News

Maldives Inland Revenue Authority (MIRA) Welcomes New Members to its Board of Directors

On 17 September, MIRA’s board members bid farewell as they concluded their terms. The outgoing board members were:

Deputy Chairperson Ms. Leena Mohamed Zahir Hussain
Board Member Ms. Aishath Asha Ali
Board Member Mr. Mumthaz Abdul Rasheed

On 28 September, MIRA welcomed its new board of directors. The newly appointed board members are:

Deputy Chairperson Mr. Husham Waheed
Board Member Uz. Ahmed Ali
Board Member Mr. Mohamed Imthinan Saudulla
Board Member Mr. Ismail Hamdhoon

Tax Appeal Tribunal Launches YouTube Channel

Following suit from High Court and Supreme Court, Tax Appeal Tribunal has launched its YouTube channel on 23 September on which it publishes recordings of its hearings. This is the first time its hearings have been publicised to the general public.

Tax Cases

Crown Company Private Limited v MIRA [TAT-CA-B/2023/029]

On 03 September, the Tax Appeal Tribunal (Tribunal) passed its judgement in Crown Company Private Limited v MIRA [TAT-CA-B/2023/029]. The Tribunal held, inter alia, the following:

Interest on a loan acquired for investing in a resident company is a deductible business expense as it was acquired wholly and exclusive for income generation as per Section 10(a) of the Business Profit Tax Act (BPT Act). Section 10(a) of the BPT Act states, “…deductions may not be made in computing any taxable profits for any tax year except in respect of expenditure incurred during that year wholly and exclusively for the purpose of production of income.” MIRA had argued that interest on a loan acquired for investing in a resident company should not be deductible as the corresponding resident dividend income would not be within the charge to tax.
Interest expense for a multi-purpose loan can be apportioned and deducted under Section 10(b) of the BPT Act with associated loan facility fees being similarly deductible. Section 10(b) of the BPT states “Expenditure which is incurred partly for the production of income and partly for some other purpose shall be apportioned between the different purposes on a just and reasonable basis, with the consent of the MIRA, and only so much as is apportioned to the purpose of the production of income shall be deemed to be expenditure within Section 10(a).”

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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