Businesses can seek MMA relief for foreign currency tax and debt payments

The Maldives Monetary Authority (MMA) has amended two regulations under the Foreign Exchange Act, allowing businesses and other parties to apply for relief in relation to certain taxes, debts and other obligations payable in foreign currency.

The central bank on Thursday published amendments to the Regulation on Registration under the Foreign Exchange Act and the General Regulation on Foreign Exchange.

Under the amended registration regulation, businesses outside the tourism sector and financial institutions will be required to register with the MMA if they earn USD 25 million or more in a calendar year from the sale of goods or provision of services.

The amendments to the General Regulation on Foreign Exchange set out the circumstances in which foreign currency transactions may be conducted and the procedures for obtaining approval from the MMA.

The regulation also requires parties to submit to the MMA, at least 30 days before the beginning of each year, details of expenditure budgeted to be paid in foreign currency.

It further sets out procedures for seeking relief in relation to requirements to deposit and exchange foreign currency and other foreign currency obligations.

The amended rules allow applications for relief in relation to taxes that are required to be paid in foreign currency and other foreign currency obligations payable to the government.

Relief may also be sought for foreign currency debts payable to a foreign financial institution operating either in the Maldives or overseas.

The rules also cover foreign currency payment obligations arising from court judgments or orders, tribunal decisions, arbitration awards or other recognised dispute resolution mechanisms.

Applications may additionally be made in relation to other foreign currency obligations approved by the MMA.

The amendments form part of the regulatory framework under the Foreign Exchange Act governing registration, foreign currency transactions and compliance with foreign exchange requirements.