Income tax in Maldives
Personal Income Tax
Tax on Business Profit
Under the Business Profits Tax (BPT) Act of 2011, a business profits tax is imposed at a rate of 15%. All persons, including individuals accruing profits from businesses, are subject to the tax on their taxable profits. The first MVR500,000 (USD32,425) is exempt from tax. Specified payments, such as management fees, technical services fee, royalty and rent for immovable property, made to nonresidents are subject to withholding tax at a rate of 10%. Certain expenses are allowed or disallowed for BPT purposes. For example, receipts that been subject to withholding tax are deductible, while private expenses are not deductible.
Losses incurred in a tax year can be carried forward and deducted against profits of the subsequent five tax years.
Companies that are registered with Maldives Inland Revenue Authority are required to file the following BPT returns and make the following payments:
· First interim return due on 31 July of the tax year: one-half of the total tax paid in the preceding tax year
· Second interim return due on 31 January of the following tax year: one-half of the total tax paid in the preceding tax year
· Final return due on the later of six months after the end of the accounting period or 30 April of the following tax year: any balance of tax due
Corporate Income Tax
Although a tax specifically applicable to corporate profits does not currently apply, a tax of 15% is imposed on the business profits of any “person” deemed to be carrying on a business. A “person” includes, but is not limited to, corporations, partnerships and individuals. The taxable profits or losses of a partnership for a year are computed as if it were a body corporate.
Also, resident and nonresident banks are subject to a tax of 25% on taxable profits.