Income Tax Regulation (Number 2020/R-21) has been published in the Government Gazette on 10 March 2020. With this, the previous Income Tax Regulation (Regulation Number 2019/R-1090) published by the MIRA on 31 December 2019 has now been repealed.
Some of the key changes of the new Regulation relates to the employment income component, which comprises;
- changes to the employee registration threshold for employee withholding tax purposes;
- supplemental rules on benefits in kind impacting the computation of employee remuneration; and
- special rules for persons under multiple employment.
It must be noted, though prior to the publication of the new Income Tax Regulation, employers were required to register all of their employees if a single employee is paid a monthly remuneration of MVR 60,000, this requirement no longer exists. With the new Regulation, if an employer has a single employee who is paid a remuneration of more than MVR 60,000 a month, the employer is required to register such employees along with other employees who are paid a remuneration of more than MVR 30,000 a month only.
Also worthy is to note that other significant changes that may have an impact on the amount of tax withheld from employees’ remuneration are now provided in provisions related to benefits in kind and multiple employment.