Maldives, Republic of

Taxable period

The taxable period is from 1 January to 31 December of the Gregorian calendar year.

Tax returns and payment of tax

All persons are required to file their income tax returns and make payments in the following manner:

• First interim payment: 31 July of the tax year.
• Second interim payment: 31 January of the immediately following tax year.
• Final payment: 30 June of the immediately following tax year.

The first and second interim payments are 50% of the previous year’s tax liability. However, the Income Tax Act allows taxpayers to make an estimate of current year tax liability and make interim payments based on that estimate. However, the final tax liability should not be more than 20% of total estimate of interim payments.

Tax audit process

In accordance with Tax Administration Act, the Maldives Inland Revenue Authority (MIRA) is required to issue an Audit Notice informing the taxpayer of the MIRA’s intention to conduct an audit in order to ascertain the amount of tax payable for a particular period.

The MIRA must conclude an audit and issue a Notice of Tax Assessment within two years from the date of the Audit Notice.

Topics of focus for tax authorities 

Tax authorities, in their audit, primarily focus on deduction of disallowable expenses, transfer pricing implication on interest payments on shareholders’ loan, and directors’ remuneration and benefits. 

Anti-avoidance rules

In accordance with general anti-avoidance rule, where the Commissioner General has reasonable grounds to believe that one of the purposes of any arrangement or transaction entered into in any accounting period was the avoidance of tax or obtaining of a reduction in tax liability, the Commissioner General may void an arrangement or transaction entered into by any person where such person has obtained a tax advantage from or under such tax avoidance arrangement or transaction by issuing an assessment order or otherwise.