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SUMMARY OF GOODS & SERVICES TAX

The Goods and Services Tax Bill was passed in the Peoples Majlis on 29

August
2011 and was ratified by the President on 02 September 2011.

Goods and Services Tax (GST) is imposed through the Goods and Services Tax Act
No 10/2011. GST will be implemented from 02 October 2011.


GST refers to tax imposed on the value of goods and services supplied in the Maldives. These exclude;
Any right or interest vested in relation to an agreement or by law
Immoveable property
Money

Input tax

Tax payable by one registered person to another registered person in relation to the supply of goods and services by
the recipient to the supplier during the course of supply of goods/services by the supplier.

Output tax

Tax chargeable on the recipient of a good or service supplied by a registered person.

Taxable activity

Any business conducted continuously or permanently for the supply of goods and services.

Activities which shall not form part of a taxable activity

Employment or work undertaken for a salary or wage under an employment contract
Employment or work undertaken by a State employee
Employment as a director in a companys board
Goods and services exempted in pursuance to the Act

Categories of tax

1. Tourism goods and services tax (T-GST)
2. General goods and services tax (G-GST)

Tourism goods and services tax

Goods and services supplied by;
o tourist resorts, tourist hotels, tourist guest houses, picnic islands, tourist vessels, yacht marinas authorised
by the Tourism Ministry;
o diving schools, shops, spas, water sports facilities and any other such facilities being operated on above
establishments
o travel agency service providers authorised by the Tourism Ministry
o domestic air transportation service providers

Goods and services supplied to;
o foreign tourist vessels entering the Maldives by their agents



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Tax rates


T-GST G-GST

1. 3.5% for the period 02 October 2011 to 31 December 2011;
2. 6% for the period 01 January 2012 to 31 December 2012;
3. 8% from 01 January 2013 onwards.

1. 3.5% from 02 October 2011 to 31 December 2011;
2. 6% from 01 January 2012 onwards.

Time of supply of goods and services

Time of supply is earlier of;
1. The time at which the tax invoice for good or service is issued;
2. The time at which the recipient of such good or service makes full or partial payment.

Where the payment for supply of goods and services is made based on instalment agreement, earlier of;
1. The date on which the instalment payment was received
2. The date on which the instalment payment falls due

Value of supply of goods and services

If the consideration for the supply is money, the value of supply equals to the amount of money.
If the consideration for the supply is not money, the value of supply equals to the open market value of the
consideration.
If the supply is made under credit contract, the value of supply equals to prices the supplier would have charged if
paid in full at the time of contracting.

Please refer Appendix for more details on exempt and zero-rated goods & services.

Taxable period

1 month period, if the persons monthly taxable supply exceeds MVR 1,000,000
3 month period, if the persons monthly taxable supply is less than MVR 1,000,000

Deadline for filing of tax return

On or before the 28
th
day of the month following the end of the taxable period.

Payment of tax

Payment should be made to MIRA on or before the deadline for filing tax return.

Setting off input tax against output tax

A registered person who sells goods or provides services does so after purchasing goods or obtaining services from
another registered person, shall pay tax to the MIRA after having deducted input tax which is payable to the registered
person who supplied such goods or services.

Issuing the tax invoice

A registered person supplying a good or service to another registered person shall at the request of the recipient,
provide a tax invoice to that recipient within 28 days of the making that request.



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Particulars required on a tax invoice

Tax Invoice written in a prominent manner
Name, address and TIN of the supplier of goods or
services
Name, address and TIN of the recipient of goods or
services
Invoice number
Date of issue
Details of services provided or details and quantity of
goods sold
The total value of goods/services supplied, excluding
the tax charged on the value of goods/services
Tax charged on the value of goods/ services supplied
The value of goods/services inclusive of tax or, if the
amount of tax has been included in the price of the
good/ service, a statement to such effect.


If the value of the goods or services supplied by a registered person is lower than MVR 5,000/-, inclusive of tax, the
TIN of the recipient of goods or services may be excluded in the tax invoice.

Registration

Persons who are carrying taxable activity in the Maldives;
whose taxable supplies during the past 12 months exceeded MVR 1,000,000/-
whose estimated taxable supplies for the following 12 months exceed MVR 1,000,000/-
who provide tourism goods and services
who are importing goods into the Maldives at the time of commencement of the Act

Limitations


This circulation contains information in summary form and is therefore intended for general guidance only. This
summary may not address the tax situation of a particular person, company, partnership or any other body of persons.
The meanings and interpretations of the provisions contained in the un-official English translation of the Act may vary
from Dhivehi version of the act. Further aspects covering the implementation of the GST Act are to be dealt with in
greater detail by MIRA regulations. You are advised to seek appropriate professional advice considering your individual
circumstances.

Should you require further information or clarifications regarding the Goods & Services Tax, please do not hesitate to
contact;

Ernst & Young
G Soasanee #1B
Rahdhebai Magu
Male
Republic of Maldives
Telephone +960 3320742
Fax +960 3320748

Dated 21 September 2011




Appendix

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Tax exempt goods and services Zero-rated goods and services

Following goods and services provided by the State institution or a provider registered with
the relevant government authority;
o Electricity
o Water
o Telecommunication service
o Sewerage facilities
o Education
o Health services
Services specified in the Regulations pursuant to the Act that facilitate and are essential for
provision of zero rated goods and services.
Medical devices stipulated in the Regulations pursuant to the Act and drugs authorized for
sale by the Government and are sold by state institution or a pharmacy registered with the
relevant government authority.
Sale of goods received as donations or gifts by State institution or a voluntary body or
association registered with the relevant government authority.
Financial services stipulated in the regulation made pursuant to the Act.
Rent earned from lease of immoveable property.
International transportation services.
Goods and services supplied to persons exempted from GST by another Act
Payments collected as fines.


Essential goods, i.e;
o Rice, sugar and flour imported by State Trading Organisation and are sold at
controlled prices.
o Salt
o Milk
o Cooking oil
o Eggs
o Tea leaves
o Deep sea fish, reef fish, all types of fish packed in the Maldives, and rihaakuru (fish
paste)
o Potatoes, onions
o Ingredients used in making curry paste (cumin, fennel, coriander, turmeric, garlic,
ginger, chilli, chilli powder, cinnamon, cardamom, peppercorn, any other such
ingredient)
o Dhiyaahakuru, coconuts (kaashi, kurunba, kurolhi)
o Carrots, cabbage, beans and tomatoes among vegetables
o All kinds of fruits
o Bread, buns and faaroshi (rusk)
o Baby diapers
o Baby food
o Cooking gas
o Diesel
o Petrol
o Adult diapers

Goods and services exported from the Maldives

Sale of a going concern

Consequences

1. Tax shall not be charged on the goods or services specified as tax exempted;

2. Input tax payable for goods and services obtained in relation to the provision of services
and sale of goods specified in tax exempted items shall not be claimed;

3. A tax invoice shall not be issued in relation to a good or service specified as tax exempted
items of the Act and, even if an invoice is issued in relation to the above it shall not include
any GST.

1. Tax shall not be charged on the goods or services specified;

2. Input tax payable for goods and services obtained in relation to the provision of services or
sale of goods specified may be claimed.