The Maldives Inland Revenue Authority (‘MIRA’) on 26 June 2020, published the Twenty-Sixth Amendment to the Goods and Services Tax Regulation (GST Regulation).
The Amendment introduces several notable changes to the GST Regulation. Section 41(a) of the GST Regulation now defines goods and services exported from the Maldives to include any good or service exported or re-exported by a business registered with the Maldives Customs Service to carry on with export and re-export, and has removed the requirement for the export business to possess an export license. The Amendment also repeals Section 59 of the Regulation which required a business to obtain prior authorisation before tax paid on irrecoverable debts could be deducted from output tax. The elimination of this requirement allows taxpayers to deduct tax paid on irrecoverable debts without seeking any authorisation from the MIRA.
The amendment to Section 88(c) removes the requirement for businesses that deregister from GST to return their GST Registration Certificate to the MIRA. Persons that are deregistered from GST will automatically have their GST Registration Certificate, and online GST logo revoked. Section 107 of the GST Regulation has been amended to include a definition for the term ‘charter’ of a vessel and special rules for determining charter arrangements. Under this definition, a charter constitutes leasing a tourist vessel for a voyage or voyages for a period not exceeding 15 days, or leasing out a tourist vessel for the personal enjoyment of the lessor. Where the lease arrangement does not meet said criteria, the operating license holder is obliged to account for GST on the goods and services supplied by that vessel, irrespective of the terms of the arrangement between the lessor and the lessee.
The Amendment also repeals Tax Ruling TR-2016/G36 (Transfer of Imported Goods) and introduces Section 113-2 which provides special rules on use and transfer of imported goods. Under Section 113-2, any individual that imports goods for personal use and sells or transfers those goods will be liable for GST. If an individual imports goods for reasons other than personal use, the use of those imported goods will also trigger GST. Companies and other legal entities that import goods must charge GST on subsequent transfer or sale of those goods.
The Amendment takes effect from 26 June 2020 onwards.