The President, on Thursday has ratified a bill that imposes a remittance tax of 3% on the money transferred abroad by expatriate workers, effective from 1 October 2016.
This Act, passed as the fifth amendment to the Maldives Employment Act, mandates employers to deposit salary and allowances of expatriates who work in the Maldives to a bank account registered in the Maldives. The obligation to deduct the remittance tax and pay to the Maldives Inland Revenue Authority is on the banks or other such service providers involved in remitting money abroad. Individual employers are therefore not required to make the deduction when paying the salaries and allowances of expatriates.
The Act itself does not specify the details of how the tax would be collected, or what would the tax treatment be if the money is spent in the Maldives instead of being remitted elsewhere. The Maldives Inland Revenue Authority is assigned to implement the tax and make regulations to enforce the tax.
News by CTL Strategies
CTL Strategies LLP is a firm specialized in providing tax and legal advisory services in the Maldives. You may contact CTL Strategies if you would like to discuss implications of this new tax on you. CTL can be contacted at ask@ctlstrategies.com and www.ctlstrategies.com
