July 28: GST deadline for 2nd quarter

One of the most significant upcoming deadlines for all GST registered persons is the deadline for submission of GST return and payment of GST. It is required by all GST registered persons to file their GST return, even if no business activity was carried out in that particular taxable period.

According to the Goods and Services Tax Act, the deadline to file the GST return is the 28th day of the month following the end of the taxable period. Therefore, those taxpayers registered for GST as quarterly filers must file their return for the previous quarter, on or before 28 July. The details of the transactions of the aforementioned quarter (1 April to 30 June) must be included in the return of the second quarter of 2015.

Furthermore, those taxpayers register ...

Importance of co-operating with an audit

When the MIRA issues an audit notice to a Taxpayer as per the Tax Administration Act, it is important that the Taxpayer ensures that they provide all documents requested by the MIRA in the audit notice and any additional documents requested by the MIRA during the audit of the Taxpayer. Tax Ruling number TR-2015/A2 states that where the Taxpayer does not provide a document that the MIRA requested for during the audit, that document cannot be submitted with any objection filed under Section 42 of the Tax Administration Act. As such, Taxpayers must be mindful of maintaining all relevant financial documents and information as per the Tax Acts, and ensure that they comply with any requests for documents made by the MIRA during an audit.

Importance of Issuing Tax Invoices and Receipts

For all the goods and services supplied by GST registered taxpayers to another registered party, if required by the recipient of the good or service, taxpayer is required to issue a tax invoice within 28 days as per section 41 of the Goods and Services Tax Act. However a tax invoice need not be issued, if the person who receives the goods or service is not a GST registered party.

Tax Invoices or Receipts must include the Name and address of the supplier, Taxpayer Identification Number of the supplier, Invoice Number, Date of Issue, Quantity and details of the goods sold or details of the services supplied, the value of the goods or services, excluding the amount of tax charged, and the tax charged on the goods or services. When issuing a tax invoice, taxpayer has to make sure that ‘Tax Invoice’ is written in a prominent manner. Since a tax invoice can only be used for deducting Input tax ...

Draft Tax Ruling on GST treatment of agency commission now open for public comments

The draft tax ruling on GST treatment of agency commission has been opened for public comments by MIRA on 9 July 2015. This ruling explains the GST treatment of commission charged by an agent in relation to goods and services supplied by the agent to its principal.

According to the draft tax ruling, agency service supplied by an agent to its principal is considered as a general sector service and is subject to GST at the general sector GST rate. Moreover agency commission on supply of exempt, zero-rated or out of scope good or service to be subject to GST at general sector GST rate. Any comments on this ruling must be emailed to comments@mira.gov.mv before 30 July 2015.

Are profits earned from sources outside the Maldives taxable?

The Business Profit Tax Act allows some of the companies incorporated in the Maldives to be chargeable to tax at a lower rate of 5% if the company is earning all of its income from sources outside the Maldives. The conditions that need to be fulfilled before a company can apply for this lower rate of tax is stipulated in section 2(b) of the Business Profit Tax Act.

First condition is that the company has to be incorporated under the Companies Act of the Maldives (law no: 10/96) and is not resident outside the Maldives. Secondly the company should derive its income from:
a) Any businesses carried on wholly outside the Maldives; or
b) bonds, shares, debentures, loans or any other financial instruments issued or granted by a Person who is not resident in Maldives; or
c) bonds, shares, debentures, loans or any other financial instruments issued or granted by a Person who is resident ...

Online Payment and Filing Regulation published

As part of the ongoing effort to make tax compliance easier, taxpayers can now file their tax returns and make payments via MIRA’s online service “MIRAconnect”. In this regard, the following tax returns and payments can be submitted through MIRAconnect. Further, taxpayers can now make BPT/GST or WHT payments via MRTGS as well.

1. MIRA 304 (BPT Return)
2. MIRA 303 (Statement of Interim Payment)
3. MIRA 301 (Withholding Tax Return)
4. MIRA 206 (GST Return – Tourism Sector)
5. MIRA 205 (GST Return – General Sector)
6. Tourism Land Rent
7. Company Annual Fee
8. Agricultural Land Rent
9. Vehicle Fee

Taxpayers who wish to obtain our online service must register for the service through the MIRAconnect portal on our website. For more information, please refer to the circular on Filing tax returns and ma ...