MIRA orders tourism businesses to disclose foreign booking partners

The Maldives Inland Revenue Authority (MIRA) has instructed businesses registered for Tourism Goods and Services Tax (TGST) to submit information on foreign tour operators, online travel agencies and bed banks involved in selling Maldives tourism products.

The instruction follows the ratification of amendments to the Goods and Services Tax (GST) Act, which require certain foreign businesses without a permanent establishment in the Maldives to register for GST with MIRA.

In a circular issued to tourism businesses, MIRA said resorts, guesthouses, travel agencies and other businesses registered for TGST must provide details of foreign agencies and platforms with which they conduct transactions.

The information must be submitted through MIRA’s Information Submission Portal before Sunday, 6 September.

MIRA said the information is being collected to determine whether foreign entities required to register under the amended GST Act have completed their registration obligations.

Under the Eighth Amendment to the GST Act, the provision of inbound tourism products to the Maldives and booking services associated with those products are classified as services supplied in the Maldives.

As a result, foreign tour operators, online travel agencies and bed banks selling Maldives tourism products can be required to register with MIRA and account for TGST even if they do not maintain a permanent establishment in the country.

President Mohamed Muizzu ratified the GST amendments on Monday as part of a package of tax and economic legislation passed by Parliament.

The amendments introduce the destination principle into the GST framework, allowing tax to be applied based on where the service is consumed rather than where the service provider is established.

Tax collection under the new provisions covering foreign tourism intermediaries is scheduled to begin in October.

The government estimates that the changes could generate about MVR 1.6 billion in additional annual revenue, including MVR 299.3 million from overseas travel agents and about MVR 1.3 billion from foreign tour operators.

The Maldives Association of Travel Agents and Tour Operators (MATATO) has raised concerns over the amendment and its implementation.

MATATO has called for further consultation with the tourism industry and has raised concerns over compliance requirements for foreign partners and the potential impact on Maldivian travel agencies and destination management companies that work with overseas businesses.