Maldives Inland Revenue Authority (MIRA) has amended their regulations, now requiring those who have earnings in foreign currency to pay Income Tax in dollars.
Maldives Inland Revenue Authority (MIRA) has amended their regulations, now requiring those who have earnings in foreign currency to pay Income Tax in dollars.
An announcement released by MIRA last night said that the Income Tax regulations have been changed. Under the new changes, those who receive earnings in dollars are instructed to prepare Income Tax statements as per the Income Tax Act in dollars. They also must pay taxes stipulated in the Act in dollars.
The amendment states that if the functional currency of the tax payer is in foreign currency, then their income tax statement and interim statement must be in USD. Their interim payment and Income Tax must also be settled in USD.
If the functional currency is foreign, then the withholding tax of those not based in Maldives, employees' withholding tax and capital gains withholding tax must also be paid in USD.
This stipulation regarding withholding tax will come into effect from November onwards.
These changes have been brought in accordance with a Cabinet decision last month, in response to the dollar shortage in the country. The cabinet also decided then that companies that earn in dollars must pay pension and customs duty in USD as well.
The government and central bank Maldives Monetary Authority are currently exploring further ways in which dollars can be retained in the country.
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