The Maldives Inland Revenue Authority (MIRA) has published an English-language version of the Advance Pricing Arrangement Regulation 2021/R-42, which was first published on 16 March 2021 and is effective from that date. Measures allowing MIRA to enter Advance Pricing Agreements (APAs) were introduced by the Third Amendment to the Tax Administration Act, which entered into force on 16 December 2020.

The objective of the Regulation is to establish the policies and procedures for entering into an APA as regards a transaction that a taxpayer intends to enter into with an associate (related party), including unilateral, bilateral, and multilateral APAs. Under the Regulation, persons that may apply for an APA include:

• A resident of the Maldives who has entered or intends to enter into an international transaction for which transfer pricing documentation is required to be maintained; and
• A non-resident of the Maldives carrying on business through its permanent establishment in the Maldives, who has entered or intends to enter into an international transaction for which transfer pricing documentation is required to be maintained.

The Regulation covers several aspects of the APA process and administration, including pre-filing consultations, requests for an APA, information required to be included in an APA, failure to comply or changes in circumstances, annual compliance report requirements, revocation, cancelation, and revision of an APA, etc. The Regulation also provides that, after considering certain factors, APAs may be applied with retroactive effect to a tax year for which the deadline for submission of the income tax return has elapsed. As per the Tax Administration Act, as amended, the term of an APA may not exceed five consecutive years.