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 references to the Act are to the Business Profit Tax Act (Law Number 5/2011), and all references to the Regulation are to the Business Profit Tax Regulation (Regulation Number 2011/R-35) as amended. This ruling is legally binding.

Introduction

1. This ruling amends section 17 of the Regulation.

Ruling

2. Amend section 17 of the Regulation as follows:

Exemption from filing tax return

(a) Individuals and deemed partnerships registered with MIRA under the Tax Administration Act (Law Number 3/2010) shall be exempt from filing a tax return for an accounting period if the gross income of that individual or deemed partnership for that period does not exceed MVR 1,000,000 (One Million Rufiyaa).

(b) Notwithstanding subsection (a), where the taxable profit of that individual or deemed partnership for that period exceeds MVR 500,000 (Five Hundred Thousand Rufiyaa), that individual or deemed partnership shall submit a tax return for that period

(c) The exemption referred to in subsection (a) and (b) shall cease to apply to an individual or deemed partnership when the individual or partnership’s gross income for an accounting period exceeds MVR 1,000,000 (One Million Rufiyaa) or taxable profit exceeds MVR 500,000 (Five Hundred Thousand Rufiyaa). This subsection shall apply for the tax year 2016 and thereafter; that is, if the individual or deemed partnership’s gross income for the tax year 2015 was more than MVR 1,000,000 (One Million Rufiyaa), or if the individual or deemed partnership’s taxable profit for the tax year 2015 was more than MVR 500,000 (Five Hundred Thousand Rufiyaa), the individual or deemed partnership shall file a tax return for the tax year 2016 and subsequent tax years, unless otherwise approved by the Commissioner General in accordance with subsection (d).

(d) Where the exemption referred to in subsection (a) and (b) ceases to apply to an individual or deemed partnership pursuant to subsection (c), and the individual or partnership then satisfies the exemption criteria in subsection (a) and (b) for 2 (two) consecutive years, the individual or partnership may request the Commissioner General for re-exemption from submitting tax returns. Such request shall be subject to a MIRA review and the individual or partnership shall continue to submit tax returns unless otherwise approved by the Commissioner General.

(e) If an accounting period is shorter than 12 (twelve) months, the thresholds specified in subsection (a) and (b) shall be pro-rated based on the number of days in that accounting period.

Date of Effect

3. This ruling shall have effect from the date of its publication in the Government Gazette.