Maldives, Republic of
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.
Employees can make an annual declaration of their income and claim any additional deductions, other than pension contribution. If an employee derives income solely from one employer, he/she is not required to file an annual tax return or interim payment.
A person is not required to file a tax return in the following cases:
- Total income is less than the amount specified in the regulation.
- Total income is derived solely from one employer.
Withholding tax on employment income
Employers are required to withhold income tax on remuneration (including non-cash benefits) paid to employees at the following rates and deposit such amount at the MIRA:
|Tax bracket (remuneration subject to employee withholding tax per month) (MVR)||Tax rate (%)|
|Not exceeding 60,000||0|
|More than 60,000 but not exceeding 100,000||5.5|
|More than 100,000 but not exceeding 150,000||8.0|
|More than 150,000 but not exceeding 200,000||12.0|
|More than 200,000||15.0|
The employers may deduct the contribution made by employees towards the Maldives Retirement Pension Scheme in calculating the remuneration for the purpose of withholding tax.
Where a person receives remuneration from more than one employer, he/she can choose one employer who shall deduct withholding tax from his/her remuneration.
The employers are required to file withholding tax returns with the MIRA on or before the 15th day of the following month and deposit the withholding tax deducted from the employees’ remuneration.
In addition, the employers are required to file a withholding tax reconciliation return to the MIRA before 28 February of the following year.
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 excessive compensation, deduction of disallowable expenses, and withholding tax obligation of employers.