Income Tax is levied under the Income Tax Act (Law Number 25/2019). The act was published in the Government Gazette on 17 December 2019 and taxation under the act commenced on 1 January 2020. However, remuneration came within the purview of income effective 1 April 2020. The tax regimes imposed under the Business Profit Tax Act and Bank Profit Tax Act were repealed with the commencement of Income Tax.
Residents of the Maldives are taxed on their worldwide income, whereas non-residents and temporary residents are taxed on the income derived from the Maldives only.
Partnerships are treated as a separate legal entity and the partnership is responsible to pay tax on its taxable income.
For the purpose of income tax, partnerships are of two types;
“Deemed partnerships” are arrangements where, two or more persons share the gross receipts and expenses, or the profit or loss, of an activity, whether or not they use a separate name and whether or not the persons have joint or common rights in any property that produces the receipts.
The tax treatment of both types of partnerships are exactly the same with respect to computation of tax, filing and making payments.
Partnerships are taxed at the following rates.
| Tax bracket for taxable income derived in an accounting period | Tax rate |
| Not exceeding MVR 500,000 | 0% |
| More than MVR 500,000 | 15% |