This ruling is issued pursuant to the authority granted under Section 84 of the Tax Administration Act (Law Number 3/2010) as amended by Law Number 14/2011. Unless otherwise stated, all legislative references are to the Goods and Services Tax Regulation (Regulation Number 2011/R-43) as amended by Tax Ruling Number 220-PR/TR/2011/8, TR-2012/G4, TR-2012/G5, TR-2012/G6, TR-2012/G7, TR-2012/G10, TR-2012/G11, TR-2013/G13, TR-2013/G14 and TR-2013/G16. This ruling is legally binding.

Introduction

1. This ruling amends sections 31, 41 and 109 of the Regulation.

Ruling

2. Amend section 31(c) of the Regulation as follows:

(c) For the purpose of Section 20(c) of the Act, exempt postal services refers to postal services, not being courier services, provided by a postal service provider registered with the relevant Government authority or State institution.

3. Amend section 41(c) of the Regulation as follows:

(c) For the purposes of subsection (b), notwithstanding the location of the person to which the supply of a service is made contractually, the service is consumed outside the Maldives if it is supplied to a person that is not a resident of the Maldives and is outside the Maldives at the time that the service is performed and:

(1) the actual physical flow of the service is not to a person in the Maldives that receives or benefits from that service; and

(2) the services are not supplied directly in connection with any property situated in the Maldives at the time that the services are performed. 

4. Amend section 41(e) of the Regulation as follows:

(e) Subsection (c) shall not apply to the supply of telecommunication services.

5. Insert the following subsections after section 41(e) of the Regulation:

(f) For the purpose of subsection (b):

(1) a service consumed outside the Maldives includes a telecommunication service supplied by a Maldives telecommunication service provider to a foreign telecommunication service provider which enables a customer of the foreign telecommunication service provider to gain access to the telecommunications network of the Maldives telecommunication service provider;

(2) telecommunication services supplied by a foreign telecommunication service provider to a Maldives telecommunication service provider, which enables a customer of the Maldives telecommunication service provider to gain access to the telecommunications network of the foreign telecommunication service provider, shall be considered as being services consumed in the Maldives by the customer of the Maldives telecommunication service provider.

(g) For the purposes of subsection (f):

(1) “Maldives telecommunication service provider” means a telecommunication service provider in the Maldives which is registered with the relevant Government telecommunications authority; and

(2) “foreign telecommunication service provider” means a telecommunication service provider that is not a Maldives telecommunication service provider.

(h) For the purposes of this section:

(1) A resident of the Maldives means a person that is “resident in Maldives” as that term is defined in Section 46 of the Business Profit Tax Act (Law Number 5/2011);

(2) A company that is not a resident of the Maldives shall be a person in the Maldives if an employee or other representative of the company is in the Maldives in connection with the performance of the service.

6. Amend section 109 of the Regulation as follows:

(a) The price of a good or service displayed to customers shall include the amount of tax chargeable for such good or service, except under the conditions specified in subsections (b) and (c).

(b) A registered person who charges a service charge in relation to the supply of goods and services may display the prices of goods and services exclusive of the amount of tax chargeable, in which case prices must be displayed in a manner in which customers can compute the total amount they must pay to the supplier. This subsection is subject to subsection (c).

(c) Telecommunication service providers, agents of telecommunication service providers and intermediary on-sellers of telecommunication services must display prices of telecommunication services exclusive of the amount of tax chargeable. Such person must display prices of telecommunication services in a manner in which customers can compute the total amount they must pay to such person in relation to the telecommunication service supplied.

(d) A person referred to in subsection (c) must prominently display in the premises where his taxable activities are carried out, a notice which indicates that telecommunication services supplied by or through that person excludes the amount of tax chargeable.

Date of Effect

7. This ruling shall have effect from 1 May 2014.