MIRA Issues Tax Ruling on Input Tax Claims

On 21 December 2023, the Maldives Inland Revenue Authority (MIRA) issued a Tax Ruling1 on the rules concerning the claiming of revenue nature input tax within a  period of 12 months.

Even before this tax ruling, it was established that input tax must be claimed against the output tax by incorporating it into the tax return for the taxable period in which the tax invoice was issued. However, if the input tax remained unclaimed during that taxable period, the GST Act allowed a grace period of 12 months for such claims. Hence, the forfeiture of input tax credit would only occur if the 12 month window elapsed from the end of the taxable period when the input tax credit could have initially been claimed.

The new tax ruling stipulates that once the grace period of 12 months have passed from the end of the taxable period in which the input tax could have been initially claimed, any subsequent attempts after the grace period to claim these input taxes will be deemed ineligible, whether it is through an amendment to the tax return of the grace period or filing of a new tax return.

For example, consider the case of Company X, a monthly GST filer. Company X receives a tax invoice on 1 February 2022. Under the general rules of the GST Act and Regulation, company X can claim this input tax by including it in any of the tax returns it submits within the grace period of 12 months, which means that it has until February 2023 to claim this input tax invoice. 

What the tax ruling prescribes is that Company X, having failed to claim the said input tax within the grace period, cannot subsequently claim the input tax by amending a grace period tax return. Say in this example, Company X realised in April 2023 that it omitted the above mentioned tax invoice. It cannot amend the February 2023 tax return (which is the last taxable period in which the mentioned input tax could have been claimed) and claim the said invoice.

The strict adherence to the 12-month timeline from February 2022 leads to the forfeiture of input tax credit associated with the invoice after the 12 month period.

This tax ruling reinforces the importance for businesses to diligently adhere to input tax claiming procedures within the specified timeframe to avoid potential forfeiture of input tax credits. It also highlights the need for thorough and timely accounting practices to ensure compliance with the provisions of the GST Act.

The above rules are not applicable to capital nature input taxes. Businesses are still required to follow the rules established under Section 46 of the GST Regulation in claiming capital nature input taxes.

This Ruling is effective from 1 February 2024.





  1. Tax Ruling (TR-2023/G-49)