The Edition


Maldives to commence Remittance Tax next month

Fathmath Shaahunaz
19 September 2016, MVT 19:30
People pictured at MIRA's service counters. MIHAARU FILE PHOTO/NISHAN ALI
Fathmath Shaahunaz
19 September 2016, MVT 19:30

Maldives Inland Revenue Authority (MIRA) announced Monday that the three percent Remittance Tax to be charged from expatriates will be in effect starting next month.

An official of MIRA stated that a draft of the Remittance Tax regulation has been compiled and publicised for public comment.

“All the clauses of the [regulation] are open for public comment in order to seek suggestions for each and every clause. We’re working to finalise the regulation and publish it by the end of this month.”

The official explained that the necessary changes have been made to MIRA’s systems in order to commence Remittance Tax.

Remittance Tax charges three percent from the amount remitted abroad by expatriates working in the Maldives. The tax will be charged directly from the person transferring money abroad.

“According to the law, tax is to be charged from the money being transferred, not deposited. Included with this tax are policies for taking money abroad as well,” said the MIRA official.

MIRA’s draft on the Remittance Tax policy states that all expatriates departing from the Maldives must declare the amount of foreign currency they carry and pay the tax accordingly. However, the draft did not specify the amount that must be declared.

Under the new regulation, all banks and money transfer institutes in the Maldives must register at MIRA for Remittance Tax, while action will be taken against those unregistered.

According to the amendments made to the Employment Act to commence Remittance Tax, the salaries of all expatriate workers in the Maldives must be deposited in accounts of banks operated in the Maldives. Employers that violate this rule will be penalised MVR 50,000.

Banks in the archipelago are currently opening accounts for expatriate workers in accordance with the amendments to the Employment Act. Bank of Maldives Ltd (BML) charges MVR 500 to open an account in Maldivian Rufiyaa or USD 20 to open a Dollar account.