- European travel bodies ABTA and ECTAA have urged the Maldives to delay new tax obligations for offshore tourism businesses, citing a short implementation window.
- The Eighth Amendment to the GST Act applies the 17 per cent TGST to qualifying foreign operators, agencies and booking platforms from 1 October 2026.
- Affected foreign businesses must register with MIRA regardless of turnover, and operators warn of losses on holidays already sold at fixed prices.
Foreign travel industry bodies have urged the Maldives to delay new tax obligations for overseas tourism businesses, warning that the short implementation period could create losses on holidays already sold and discourage smaller operators from offering Maldives packages.
The concerns relate to the Eighth Amendment to the Goods and Services Tax Act, which was ratified and published on 31 August 2026. Qualifying offshore supplies of Maldives tourism products and related booking services will become subject to the 17 per cent Tourism Goods and Services Tax from 1 October.
ABTA, the largest travel association in the United Kingdom, first raised the issue in a letter sent to Tourism and Aviation Minister Mohamed Ameen on 27 August, before the amendment was ratified. The association represents around 3,500 consumer brands with combined annual turnover exceeding GBP 41 billion.
The European Travel Agents’ and Tour Operators’ Associations, ECTAA, raised similar concerns in a letter sent to Maldives Ambassador to Belgium and the European Union Uza Fathimath Dhiyana on 2 September.
The amendment extends the Maldives’ tourism tax framework to qualifying foreign tour operators, travel agencies and booking platforms without a fixed place of business in the country. It applies the destination principle, under which certain tourism services consumed in the Maldives may be treated as supplied in the country even when booked and paid for overseas.
The affected products include accommodation, meals, transport and other tourism activities in the Maldives. Whether an individual transaction is covered will depend on factors including the contractual arrangement, the service being supplied, the recipient and the recipient’s GST registration status.
For a qualifying offshore resale, the tax is not calculated on the operator’s entire customer payment. The operator may subtract the amount payable to a GST-registered supplier for the tourism product from the amount received from the customer.
The remaining difference is treated as inclusive of the 17 per cent TGST. Related agency and booking services may instead be taxed according to the commission or booking fee earned, depending on how the arrangement is structured.
Foreign businesses covered by the tourism provisions are required to register with the Maldives Inland Revenue Authority regardless of their turnover. This means smaller specialist operators may face the same registration requirement as larger companies selling substantial volumes of Maldives holidays.
ECTAA said the timing is particularly difficult because tour operators negotiate supplier contracts and prepare holiday programmes several months in advance. Many Maldives packages for the coming European winter season have already been advertised and sold at fixed prices.
European consumer protection rules allow package prices to be increased only in limited circumstances. ECTAA argued that some operators may therefore be unable to pass the new tax to travellers and could be required to absorb it from their existing margins.
Companies may also need to revise brochures and other marketing materials containing prices calculated before the amendment was introduced.
Both organisations raised concerns about the cost of registration, reporting, margin calculations and cross-border tax payments. ECTAA warned that these requirements could be disproportionate for companies selling only a small number of Maldives packages.
It asked the Government to consider a registration threshold or simplified system for smaller foreign businesses. As a comparison, ECTAA noted that New Zealand generally requires non-resident suppliers to register only when relevant supplies exceed NZD 60,000 over 12 months.
The organisations also sought further guidance on transactions involving several intermediaries. An overseas operator may purchase directly from a Maldivian resort or obtain a complete package through a local travel agency or destination management company that works with multiple suppliers.
Questions also remain over registration procedures, returns, payments, cancellations, refunds and corrections. ABTA requested clarification on the treatment of bookings made before the new obligations take effect.
Under existing GST rules, the time of supply is generally determined by the earlier of when an invoice is issued or when full or partial payment is received, subject to applicable exceptions. The booking date or travel date alone may therefore not determine whether a transaction falls within the new framework.
ABTA and ECTAA have called for implementation to be postponed while the Government consults foreign travel businesses and issues detailed guidance. ECTAA also requested transitional arrangements for packages that have already been contracted or sold.
Both organisations acknowledged the Maldives’ right to determine its tax policy but warned that implementing the obligations without sufficient preparation could affect overseas distribution of Maldives tourism products.
