MIRA Lays Down the Rules to Determine the Boundary of Tourist Hotels and Tourist Guesthouses for GST Purpose

Goods and Services Tax Act states that goods sold and services supplied by diving schools, shops, spas, water sports facilities and other such places established on a tourist hotel or tourist guesthouse shall be considered as “tourism sector” business activities for GST purposes.

Pursuant to the Tax Ruling TR-2016/G40 (First amendment to the Tax Ruling TR-2016/ G33), any business activity situated within the boundaries of a tourist hotel or tourist guesthouse would be considered as a place established on the respective tourist hotel or guesthouse, and therefore must be registered for tourism sector GST. The boundaries of a tourist hotel or tourist guesthouse would be determined based on the operating license or any other document issued by the Ministry of Tourism to that hotel or guesthouse.

In this regard, persons conducting business activities that are situated within the premises of tourist hotels and tourist guesthouses are required to register for tourism sector GST or obtain a written document from the Ministry of Tourism which evidences that the activity is outside the boundaries of the tourist hotel or guesthouse (even though it is situated within its premises), by 1 January 2017. Where such a document is not obtained from the Ministry of Tourism by 1 January 2017, MIRA would register such business activities for tourism sector GST and notify the operator accordingly.

However, all the business activities conducted on premises of a tourist hotel or tourist guesthouse which is located on land leased by the Government, a City Council, an Atoll Council or an Island Council for the purpose of developing and operating a tourist hotel or a tourist guesthouse, must be registered for tourism sector GST.

For more information, taxpayers can call 1415 during office hours or email to 1415@mira. gov.mv or refer to Industry Tax Guide: Tourist Guesthous

05 Dec 16