On 10 June 2020, the Maldives Inland Revenue Authority issued the Transfer Pricing Regulations (Regulation No. 2020/R-43), detailing the rules that must be followed in the preparation and maintenance of transfer pricing documentation required under section 68 of the Income Tax Act.

The Regulations stipulate that the following information must be included in the transfer pricing documentation prepared in respect of transactions and arrangements between an entity and its associates:

• An overview of the business of the entity’s group, the group’s global business operations, its overall transfer pricing policies and its global allocation of income and economic activities in the respective period (the “master file”), including details about the group’s intangible assets that were used or applied to the business of the entity during the period and details about the group’s financial activities that are connected with the business of the entity during the period.
• Information about the entity’s business and its transactions with related parties during the period (the “local file”).

The Income Tax Act specifies that transfer pricing documentation is not required to be maintained by businesses categorised as micro, small or medium enterprises under the Small and Medium Enterprises Act (Law No. 6/2013). Arrangements and transactions made in respect of exempt income are also exempt from the requirement. The Regulations specify additional transactions which qualify for the exemption subject to certain conditions.

The Regulations took effect from 10 June 2020.