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) Forwards Tax Evasion Case for Prosecution

On 17 August, MIRA announced that it has forwarded a tax evasion case against Hope Holdings for prosecution after conducting an investigation. MIRA’s investigation revealed the following:

The business had understated its revenue by 89% in its GST returns during the taxable periods 01 July 2020 to 31 May 2023.
The business had understated its income by MVR 29m in its income tax returns for tax years 2020 and 2021.

MIRA stated that it will be seeking prosecution of the business, the business' partner Shahudh Ibrahim Manik and a key person involved in business operations, Mohamed Ali.

Tax Cases

Dhivehi Raajjeyge Gulhun Plc v MIRA [TAT-CA-W/2022/010]

On 14 August, the Tax Appeal Tribunal (Tribunal) passed its judgement in Dhivehi Raajjeyge Gulhun Plc v MIRA. The case concerned whether withholding tax is chargeable on cableship standing charges and GSM membership fees under Section 6(a) of the Business Profit Tax Act (BPT Act). In its judgement, the Tribunal highlighted the following:

Cableship standing charges fall within Section 6(a)(1) of the BPT Act as it is an amount paid to retain the use of a tangible good for the contractual duration.
Withholding tax is chargeable on GSM membership fees under Section 6(a)(4) of BPT Act, following the decision of the Tribunal in Dhivehi Raajjeyge Gulhun Plc v MIRA (TAT-CA-W/2020/004).

Conclusion

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