Double Taxation Avoidance Agreements (DTAAs)

DTAAs are aimed for those persons who, without such an arrangement, would have to pay tax on the same income in more than one jurisdiction.

As of date, only one DTAA has been signed by the Maldives which is a limited multilateral agreement between members of the South Asian Association for Regional Cooperation (SAARC) for avoidance of double taxation and mutual assistance in tax matters. The agreement was signed on 13 November 2005.

SAARC Limited Multiletral Agreement on Avoidance of Double Taxation    

Amendment to SAARC Limited Multiletral Agreement on Avoidance of Double Taxation    

The Maldives has not yet entered into any bilateral DTAA with any country.

Tax Information Exchange Agreements (TIEAs)

These agreements enable the sharing of taxpayer information between two jurisdictions for compliance purposes.

Currently negotiations on an agreement for exchange of information relating to tax matters are on-going between India and the Maldives. Two rounds of negotiations have been held as of date.

Reciprocal arrangements

Business Profit Tax

Under Section 16 of the Business Profit Tax Act (Law Number 10/2011), a non-resident owner or charterer of a ship or aircraft may be exempt from the tax if the Commissioner General is satisfied that a reciprocal treatment for business profit tax or any other similar tax is granted by the taxpayer’s country of residence to a Maldivian-resident taxpayer.

An exemption under this arrangement has been granted so far to:

• Countries that do not impose tax on business profits or income

• Austria*

• Denmark*

• Ireland*

• Mauritius

• Qatar

• Switzerland*

• United Arab Emirates

* Exemption from withholding tax on lease payments only

However, a person resident in one of the above-listed countries is eligible for this exemption only if he is not a resident of the Maldives and does not carry on any business other than that of utilizing his aircraft or ship. Your country of residence for the purposes of section 16 shall be determined based on the location of your central management and control.

If you meet these conditions, request to the Commissioner General of Taxation in writing in order to be granted the exemption.