On 15 December 2020, the Maldives Inland Revenue Authority (MIRA) issued the Twenty-Eighth Amendment to the Goods and Services Tax (GST) Regulations (2020/R-119) (the Amendment).

Major provisions in the Amendment are summarized below.

Time of Supply where Consideration is in Kind

• The time of supply of a transaction for which consideration is in kind, is the earlier of the time at which an invoice is prepared or the time at which full or partial consideration is provided.
• Each party to the transaction will be deemed to have provided a good or service to the other.
• Where the consideration is the granting of the right to use an immovable property, the time of supply is the earlier of the time at which the person who supplied the good or service acquires the right to use the property or the time at which the person starts using the property.

Goods and Services Supplied in the Maldives

• Goods are deemed to be supplied in the Maldives if the supplier and the recipient are in the Maldives at the time the goods are sold.
• Services are deemed to be supplied in the Maldives if the supplier is in the Maldives at the time the services are performed.
• Notwithstanding the above, goods and services are deemed to be supplied in the Maldives if the goods are in the Maldives at the time the goods are sold, or the services or part thereof are physically performed by or through a person who is in the Maldives at the time the services are performed.
• A company or any other incorporated body is deemed to be in the Maldives if it is incorporated in the Maldives, or has its head office situated in the Maldives, or its management and control is in the Maldives.
• A partnership or any other unincorporated body is deemed to be in the Maldives if it is established or formed in the Maldives, or its management and control is in the Maldives.
• An individual is deemed to be in the Maldives if the individual’s permanent place of living is in the Maldives, or is present in the Maldives or intends to be present in the Maldives for 183 days or more in any 12-month period commencing or ending in a calendar year.
• Notwithstanding that a person is deemed not to be in the Maldives as per the above rules, goods and services are deemed to be supplied in the Maldives if the goods are in the Maldives at the time they are sold or the services or part thereof are physically performed by or through a person who is in the Maldives at the time they are performed.

Other Major Provisions

• Where a good or service is supplied indirectly via a person that is related to the supplier, the consideration for the supply is the greater of the consideration that the person who enjoys the benefit of the supply pays any person for that benefit and the consideration that the person that is issued with an invoice for the supply pays for it.
• Input tax pertaining to capital expenditure not exceeding MVR 500,000 which remains unclaimed by the end of the 12-month duration specified in section 46(a)(1) of the GST Regulations, and input pertaining to capital expenditure exceeding MVR 500,000 which remains unclaimed by the end of the 36-month duration specified in section 46(a)(2) of the GST Regulations, may be set off against the output tax in subsequent taxable periods. Prior to the Amendment, such unclaimed input tax was not allowed to be set off against output tax.

The Amendment came into effect on 15 December 2020.