Maldives Inland Revenue Authority (MIRA) has revealed the withholding tax from salary will be imposed from April 2020. Although the income tax was ratified making it effective from January 1, a further period has been given to impose withholding tax from salary.
Speaking on a programme aired on PSM News, Deputy Commissioner of Taxation Asma Shafeeu stated the withholding tax from salary must be paid from April 1 onwards. Asma underlined it is the responsibility of the employer to deduct and submitting the allocated amount from employees receiving over USD 3,892 as salary.
Income tax is levied on personal income and profit earned from businesses covering income received from entities in the Maldives by local and foreign individuals and companies, according to the bill. Income tax would be imposed on salary and wages; business profit; revenue from leasing current assets and non-current assets; dividend; interest; annuity; pension; retirement benefits; salary of beneficiaries; technical service fees; commissions; royalties; capital gains from disposal of current assets and non-current assets, shares and other business investments; and, any other income received from whichever source derived.
Business Profit Tax and Bank Profit Tax regimes would be integrated into the new law, while the Land Sales Tax, Tax levied from the revenue of Petroleum Companies and the Remittance Tax would be abolished once the new law comes into effect. It levies taxes on residents for income earned within or outside the Maldives; non-residents for income generated in the Maldives; and from temporary residents for income sourced in the Maldives.
The tax rates would remain unchanged for banks at 25% on profits, while taxes of 15% on profits that exceed 32,349 US dollars would be levied on corporations, partnerships and other business entities. The law also outlines exemptions on income tax.