Maldives, Republic of

Individual - Sample personal income tax calculation

Last reviewed - 03 August 2020

Example 1

Mr. X is an employee at ABC Pvt Ltd. In 2020, Mr. X receives MVR 125,000 per month as his remuneration (after the deduction of his contribution to the Retirement Pension Scheme). Mr. X lives with his family in a 3-bedroom apartment provided by the company. The company pays MVR 30,000 per month as rent to the owner of the building.

The monthly remuneration received by Mr. X in this case is (125,000+30,000) MVR 155,000.

Monthly remuneration subject to withholding tax (MVR) Tax rate (%) Income distributed among the brackets (MVR) Withholding tax amount to be deducted (MVR)
60,000 or less 0 60,000
More than 60,000 but less than or equal to 100,000 5.5 40,000 2,200
More than 100,000 but less than or equal to 150,000 8.0 50,000 4,000
More than 150,000 but less than or equal to 200,000 12.0 5,000 600
More than 200,000 15.0 - -
Total 155,000 6,800

Example 2

In addition to the remuneration Mr. X received in example 1, he received MVR 12 million from a shop he started operating from 1 January 2020 as his total income. The amount of business expenses deductible under the law came to MVR 9 million. Thus, the taxable income Mr. X derived from the business is (12-9) MVR 3 million.

Type of taxable income Total income (MVR)
Remuneration (155,000 x 9) 1,395,000
Business income 3,000,000
Total 4,395,000

Mr. X should calculate his tax payable as depicted in the below table.

Monthly remuneration subject to withholding tax (MVR) Tax rate (%) Income distributed among the brackets (MVR) Withholding tax amount to be deducted (MVR)
60,000 or less 0 720,000
More than 60,000 but less than or equal to 100,000 5.5 480,000 26,400
More than 100,000 but less than or equal to 150,000 8.0 600,000 48,000
More than 150,000 but less than or equal to 200,000 12.0 600,000 72,000
More than 200,000 15.0 1,995,000 299,250
Total 4,395,000 445,650

Example 3

Mr. X from examples 1 and 2 sells his car for MVR 165,000 in the year 2020. He had bought the car for MVR 110,000, so his capital gains from this transaction is (165,000 - 110,000) MVR 55,000. In addition, Mr. X’s father gave him MVR 400,000 as a gift during the year.

So now Mr. X has to pay tax from the aggregate of the amounts he received as remuneration, business income, and capital gains in the year 2020. The amount of gift Mr. X received does not have to be included in his taxable income as it was gift from a relative (his father).

Type of taxable income Total income (MVR)
Remuneration (155,000 x 9) 1,395,000
Business income 3,000,000
Capital gains 55,000
Total 4,450,000

It is assumed that the tax payable amount Mr. X had estimated for the year 2020 was MVR 250,000. Thus, Mr. X had paid MVR 125,000 (half of the total estimated amount) for each interim payment during that year.

Mr. X should calculate his tax payable from his total taxable income as depicted in the below table.

Monthly remuneration subject to withholding tax (MVR) Tax rate (%) Income distributed among the brackets (MVR) Withholding tax amount to be deducted (MVR)
60,000 or less 0 720,000
More than 60,000 but less than or equal to 100,000 5.5 480,000 26,400
More than 100,000 but less than or equal to 150,000 8.0 600,000 48,000
More than 150,000 but less than or equal to 200,000 12.0 600,000 72,000
More than 200,000 15.0 2,050,000 307,500
Total 4,450,000 453,900
Amount deducted as withholding tax from Mr. X's salary (6,800 x 9)   (61,200)
First interim payment   (125,000)
Second interim payment   (125,000)
Final payment   142,700