President Ibrahim Mohamed Solih has signed
the Income Tax Bill into law yesterday afternoon, 17th December 2019.
Parliament passed the bill on 4th December 2019, at the 75th sitting of its
third session.
As per the bill, income tax is levied on
personal income and profit earned from businesses covering income received from
entities in the Maldives by local and foreign individuals and companies. Income
tax would be imposed on salary and wages; business profit; revenue from leasing
current assets and non-current assets; dividend; interest; annuity; pension;
retirement benefits; salary of beneficiaries; technical service fees;
commissions; royalties; capital gains from disposal of current assets and
non-current assets, shares and other business investments; and, any other
income received from whichever source derived.
Annual personal income tax payables for
individuals are categorised under five brackets;
Below MVR720,000 0%
MVR720,000-MVR1,200,000 5.5%
MVR1,200,000-MVR1,800,000 8%
MVR1,800,000-MVR2,400,000 12%
Above MVR2,400,000 15%
Employee Withholding Tax would be liable
under the following five brackets;
Below MVR60,000 0%
MVR60,000-MVR100,000 5.5%
MVR100,000-MVR150,000 8%
MVR150,000-MVR200,000 12%
Above MVR200,000 15%
Business Profit Tax and Bank Profit Tax
regimes would be integrated into the new law, while the Land Sales Tax, Tax
levied from the revenue of Petroleum Companies and the Remittance Tax would be
abolished once the new law comes into effect. It levies taxes on residents for
income earned within or outside the Maldives; non-residents for income
generated in the Maldives; and from temporary residents for income sourced in
the Maldives.
The tax rates would remain unchanged for
banks at 25% on profits, while taxes of 15% on profits that exceed MVR 500,000
would be levied on corporations, partnerships and other business entities. The
law also outlines exemptions on income tax. Upon ratification, the law has been
now published in the Government Gazette and will come into effect from 1st
January 2020.
Please login to Comment