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Maldives Publishes Income Tax Regulation Amendments — Orbitax Tax News & Alerts

The Maldives Inland Revenue Authority (MIRA) has published an English-language version of the First Amendment to the Income Tax Regulation (2020/R-56). Published in the original language on 20 July 2020, some of the main amendments include the following:

  • A new subsection 99(c) is inserted, which provides that a person carrying on the business of insurance shall use MIRA 605 (Income Tax Return – Insurance Businesses) form to file the income tax return;
  • A new section 100-1 on the computation of interim payments is inserted, providing that interim payment amounts may be estimated according to Section 43(a) or 43(d) of the Act in the first interim return as well as in the second interim return and the amount of withholding tax expected to be deducted may only be deducted if the interim payment amounts are estimated according to Section 43(a) or 43(d) of the Act:
    • 43(a) Each of the two interim payments payable by a person under the Act for the person’s first tax year in which the person is liable to pay tax shall be equal to one-half of the amount of tax payable for the accounting period ending in that tax year, estimated by the person; and
    • 43(d) Where a person has reasonable grounds to expect that the tax payable for a tax year will be less than the tax payable for the previous tax year, that person may make a reasonable estimate of the amount of interim tax payable;
  • A new section 102 is inserted regarding the submission of consolidated financial statements to MIRA, which provides that where the taxpayer is a parent entity, the entity shall, together with that entity’s income tax return, submit consolidated financial statements to MIRA for all entities in the group of entities for which it is the parent entity, and the consolidated financial statements shall be prepared in accordance international accounting standards using the accrual basis of financial accounting;
  • It is also provided that, notwithstanding financial statements prepared by an entity as above, each entity in a group of entities shall also prepare separate financial statements in accordance with international accounting standards, and submit separate income tax returns; and
  • It is provided that accounting standards approved by the Commissioner General include:
    • International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS);
    • International Financial Reporting Standards for Small and Medium Sized Entities (IFRS for SMEs); and
    • Accounting and Auditing Organization for Islamic Financial Institutions Standards (AAOIFI).

The amendments to the Income Tax Regulation are effective from the initial date of published, 20 July 2020.