A Business in Maldives is Not Exempt from Paying WHT even if the Transaction was Made via a Foreign Bank, The High Court Rules

The High Court has ruled that no exception is given from paying withholding tax even if a foreign bank was used to make the payment as long as the beneficiary of the payment is a business registered in Maldives.

The judgement states that withholding tax determined by MIRA in relation to a payment for advertising a guesthouse operated by Aishath Asima, regardless of the fact that the payment was made by her husband using a credit card issued by a foreign bank, as the beneficiary of the transaction is the business owned and operated by Aishath Asima, will be liable to pay withholding tax on the transaction.

As such the High Court decided that there were no grounds to amend the decision made by the Tax Appeal Tribunal regarding the appeal filed by Aishath Asima.

The case is regarding the decision made by MIRA followed by an objection filed with regard to an assessment issued by MIRA to recover the tax payable to the state, which was then upheld by Tax Appeal Tribunal in 2014 following an appeal by Aishath Asima to the High Court Pursuant to section 6 of the Business Profit Tax Act, certain payments made or payable by a person carrying on business in the Maldives to a non-resident are subject to a final withholding tax at source at the rate of 10% of the gross amount of the payment.

15 Dec 16