Tax obligations of the businesses carried out in the atolls

Businesses conducted in the atolls need to adhere to the tax system, similar to those in Male’. In addition to general retail trading, ferrying of people and goods, fishery, masonry and carpentry, agriculture, handicrafts, supply of fuel, etc., are all considered as business activities and need to register with MIRA according to the stipulated rules and regulations.

In addition to business registration, businesses need to register for GST (Goods and Services Tax) separately, if they fulfill the requirement to register. Businesses need to register for GST if their turnover exceeds MVR 1 million in the past 12 months or is expected to exceed MVR 1 million in the following 12 months, or if they have acquired an import license or if they are engaged in a business supplying tourism goods and services. Businesses can register for GST voluntarily even if they don’t fulfill any of the above requirements. Once registered for GST, taxpayers are required to submit GST returns on the prescribed deadlines irrespective of their sales volume. Furthermore, apart from individuals whose annual turnover is less than MVR 750,000 and with taxable profit less than MVR 500,000, all others (individuals, companies, partnerships and other entities) need to file BPT returns, irrespective of the revenue generated.

Taxpayers are required by law to maintain business records and documents for a minimum period of 5 years. As such details of income and expenditures, personal expenditures, records of damaged and lost goods, capital expenditure are some of the records that need to be maintained under this obligation. Starting from 1 April 2015, MIRA has been taking actions against taxpayers who don’t maintain proper records.