On 10 March 2020, the Maldives Inland Revenue Authority (MIRA) issued the Income Tax Regulations (2020/R-21) (the Regulations), replacing the regulations which were issued on 31 December 2019.

Key changes from, and additions to, the original regulations are summarised below.

Registration

• An employee must be registered as a taxpayer under the Income Tax Act (ITA) if the expected average monthly employment income in the following 12 months exceeds MVR 60,000, or if the actual employment income for 2 consecutive months exceeds MVR 60,000 for each month.
• Where an employer registers their employees by virtue of the above, the employer must also register all employees whose expected average monthly employment in the following 12 months exceeds MVR 30,000.

Fringe benefits

• Allowances and benefits granted by an employer to an employee, unless explicitly excluded from the definition of employment income, shall be subject to tax.
• The Regulations highlight some types of fringe benefits which are subject to tax and prescribe the rules for valuation of such benefits.

Tax returns

• The employee withholding tax (EWT) return submitted by an employer must include information about all employers registered in accordance with the revised employee registration rules. In the original regulations, employers were required to include information about all employees.
• An individual is not required to file an income tax return for a tax year if the taxable income and gross income of that individual for that year did not exceed MVR 720,000 and MVR 2 million respectively, or if the total income derived by the employee during the year consisted solely of employment income paid by a single employer.
• The EWT return, the EWT reconciliation return and the non-resident withholding tax (NRWT) return must be submitted via MIRA’s online portal, MIRAconnect. Payments related to these returns must also be made via MIRAconnect or via the Maldives Real-Time Gross Settlement (MRTGS) facility.