Maldives mandates foreign currency revenue tax in dollars
Economic minister Mohamed Saeed had earlier said that the state would receive an estimated $40-80 million in additional revenue.
Tax regulations have been amended to require foreign currency income to be taxed in dollars.
The amendment, published in the government gazette on Thursday, states that if the functional currency of businesses is a foreign currency, the currency of presentation or tax returns, financial statements and documents filed with Maldives Inland Revenue Authority (MIRA) will be the dollar.
The change will take effect from 2024.
Previously, the rule was that if the functional currency was the dollar, the presentation currency was the dollar. However, if the functional currency is not Rufiyaa or dollar, the choice of Rufiyaa or dollar as the presentation currency is left open.
The amendment states that:
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If the presentation currency of a business is Rufiyaa, the tax and interim payments due to MIRA on taxable income can be paid in Rufiyaa or dollars
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If the presentation currency is dollars, both this tax and interim payment will be paid in dollars
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Although the change will take effect from tax year 2024, it will not be apply when the first interim payment is made
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The same procedure applies to the payment of non-resident withholding tax, employee withholding tax and capital gains withholding tax; This change will apply to payments for periods ending on or after October 31
Previously, withholding tax statements had to be prepared in Rufiyaa.
Economic minister Mohamed Saeed had earlier said that the state would receive an estimated $40-80 million (MVR 617 million - MVR 1.2 billion) in additional revenue from the switch from dollar-denominated taxpayers.
The government announced measures to boost dollar revenue and retain that type of revenue in the country in response to BML’s move last month to ban overseas transactions with Rufiyaa cards.
The decisions include the conversion of income tax, pensions and import duties to dollars.
