This is the unofficial translation of the original Act in Dhivehi and consists only the content pertaining to taxation. In the event of conflict between this translation and the Dhivehi version of this Act, the latter shall prevail. Therefore, it is advised that both the Dhivehi version of this Act and this translation be read concurrently.
The Special Economic Zones Act (Law Number 24/2014) shall be amended as follows:
1. Amend Section 9 of the aforementioned Act as follows:
9. Special Economic Zone
“Special Economic Zone” or “Zone” shall mean a specific geographical area demarcated by boundaries or identified by latitude and longitude, placed under the single management of one Developer who engages in, establishes, or carries out a prescribed economic activity, where the developer is entitled to special incentives and the area is designated as a special customs area that is exempt from the general mandate of the Maldives Customs Services insofar as it relates to the levying of export or import duty; and includes, to the necessary extent, each type of Special Economic Zone specified in Section 10 through Section 17-1 of this Act.
4. Insert the following Section after Section 22 of the aforementioned Act:
22-1. Property Transfer Tax
(a) Where a villa or a room in a tourist resort or an integrated tourist resort in a zone is leased on a long‑term strata basis, a property transfer tax shall be collected by the State at the rate of 4% (four percent) of the total sale price of the rights to such villa or room.
(b) It shall be the responsibility of the seller of the villa or room to collect from the buyer the tax specified in subsection (a) and pay the tax to the Maldives Inland Revenue Authority.
CHAPTER 10
Developing Sustainable Townships
70-2. Special concessions
(a) Concessions to a zone established under Section 20(i) of this Act, and to the developer and investors of that zone, may only be granted in accordance with this Section, and such a zone shall not be eligible for any other concessions under this Act.
(1) Property transfer tax levied on income derived from a long-term strata-based lease of a villa or room in a zone, or from the sale of rights to such a villa or room, shall be levied at the following rates:
(i) At the rate of 1% (one percent) for the first transaction;
(ii) At the rate of 2% (two percent) for the second transaction;
(iii) At the rate of 4% (four percent) for the third transaction and all subsequent transactions.
(2) Tax under the Income Tax Act (Law number 25/2019) on business income derived from business activities carried out in the zone shall be levied at the following rates:
(i) At the rate of 5% (five percent) for the first 10 (ten) years;
(ii) At the rate of 10% (ten percent) from the 11th (eleventh) year until the 20th (twentieth) year;
(iii) At the rate prescribed in the Income Tax Act (Law number 25/2019) from the 21st (twenty-first) year onwards.
(3) The profit or gain derived from the sale of a residential villa or room developed in the zone shall be exempt from the tax levied under the Income Tax Act (Law Number 25/2019).
(4) Capital goods imported for the development of the zone shall be exempt from import duty.
(b) Notwithstanding anything to the contrary in this Act, incentives specified in Section 23 of this Act shall not apply to a zone specified in Section 20(i) of this Act.
(c) The zone specified in Section 20(i) of this Act shall be exempt from the rule specified in Section 73(b) of this Act.
8. Amend Section 79(b)(12) of the aforementioned Act as follows:
79. (b) (12) Law number 25/2019 (Income Tax Act)
10. The phrase “Business Profit Tax” shall be replaced with “tax on business income”, wherever it appears in the aforementioned Act.
11. The regulations pursuant to this Act shall be formulated and published in the Government Gazette within 6 (six) months from the commencement of this Act.
12. This Act shall commence upon it being published in the Government Gazette following its passing and ratification.